Six Kenya government institutions fail to pay Sh7b Treasury loan

NAIROBI, KENYA: Six Government institutions have defaulted on repaying money lent them by the National Treasury.

The six, including a commercial bank, owed the Government a combined Sh7.35 billion as at June 30, 2013, way past the due date for repayment.

According to the Auditor General’s report on the utilisation of public funds over the 2012/13 financial year, the institutions have neither made an effort to repay their loans nor offered explanations on why the debts remain outstanding.

The six institutions, according to the report, are Co-operative Bank, Coffee Board of Kenya, the National Irrigation Board, Water Resource Management Authority, Pyrethrum Board of Kenya and the Lake Victoria South Water Services Board.

Largest debtor

“No reasons have been provided as to why the institutions failed to remit their loan repayments to the Treasury,” said Auditor General Edward Ouko in the report.

The Coffee Board is the largest debtor, with two loans of Sh3 billion and Sh260 million, both of which were due for repayment on June 30, 2009.

The National Irrigation Board also has two unpaid loans of Sh1.66 billion that were supposed to have been paid by March 30, 2008, and another of Sh594 million due on September 30, 2008.

The Pyrethrum Board of Kenya owes Treasury Sh863 million that it was supposed to have paid back by June 30, 2008.

Co-operative Bank owes the Government Sh250 million that was due for repayment on March 4, 2012.

The Water Resource Management Authority had been advanced two loans, one for Sh103 million that was due on September 30, 2008, and another for Sh259 million due on September 30, 2009.

The report notes that the Sh7.35 billion debt is part of a total Sh166.9 billion owed to the Government as of June 30, last year.

“The Consolidated Statement of Outstanding Loans as at June 30, 2013 reflects a total loans lent balance of Sh185.3 billion, out of which an amount of Sh18.4 billion has been repaid, written off or converted to equity, leaving a balance of Sh166.9 billion.”

The cash owed to the Government almost doubled during the 2012/2013 financial year, going up 90 per cent to Sh166.9 billion from Sh78 billion the previous year.

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