MPs fault Treasury over Sh108 billion loans
By Mercy.Mwai, October 5, 2023
A House committee has accused the National Treasury of failing to provide details of loans amounting to Sh108.18 billion that the government took from September last year and April this year to finance various projects.
The Public Debt and Privatization Committee in a report tabled in the National Assembly said the loans lacked project-specific information required to guide policymaking and oversight, which indicates a low level of transparency and accountability
The committee also raised concern that the National Treasury did not adhere to Section 31 of the PFM Act, 2012 should have guided their reporting under the Program Budgeting model and should have indicated the implementing Agencies, Key Performance Indicators (KPIs), output targets and activities, among other factors.
Reads the report: “There was no information provided on project appraisal, evaluation of the sustainability of the projects and the capacity to generate financial or economic returns to repay the loans when they fall due.”
It adds: “In order to facilitate oversight of debt and to promote transparency and accountability of loans contracts entered into, the National Treasury should attach the contracts signed against each submitted report and should not enter into any contract that does not adhere to the principles of public finance.”
The committee also faulted the Treasury for failing to include a statement of loan balances, carried down and drawings of new foreign loans to the county governments, a statement on loans made to national government entities and related contingent liability exposure.
A report by the Controller of Budget indicated that as of June 2022, there were Sh218.8 billion in non-performing loans charged against various government entities.