Raila-Kenyans need clarity and probity on euro bond loan

In recent weeks, as our financial situation has taken a turn for the worse, the Jubilee administration has struggled to wish away one financial misstep that appears to be at the centre of our woes---the Euro Bond loan and its misuse.

The administration has struggled to table suspect figures that don’t add up. It has also offered explanations that fail to convince on why proceeds of Euro Bond had to be banked in offshore accounts and the amount of interest it earned. The administration has equally failed to explain what the money was used for.

This whiff of scandal is steadily drifting into State House where the initial announcement on the benefits of the Euro Bond originated. By refusing to come clean, the administration is only reinforcing public perception that it has something to hide.

After a careful reading of the reports of the Controller and Auditor General and the Controller of Budget, we are more than convinced that the Jubilee administration is misleading Kenyans on Euro Bond. We therefore demand that the Government addresses the following aspects of the loan:

1.      The total proceeds of Eurobond were 2.75 billion dollars.

2.      Once the government saw the oversubscription of the initial 2 billion dollars, it took in another 750 million dollars.

3.      Last year’s budget documents captured by the Controller of Budget reflect Eurobond proceeds of Ksh. 141 billion.  This is the difference between the 2 billion dollars and the amount used to pay the syndicated loan.

·        The 750 million dollars (Ksh. 75 billion) is not reflected in either last year’s or this year’s budget. The government therefore has two things to explain.

(i)  What did the government do with Ksh141 billion which is reflected in last year’s budget? Kenya’s economy cannot absorb that kind of money in one year. It is too much. If it was used to build infrastructure, we would be seeing those infrastructure developments.

·        Ksh141 billion can build a new Thika Super Highway, plus all the bypasses around Nairobi in addition to financing Kengen’s 280 MW project, Greenfield terminal and Lamu Port, in addition to many mega projects.  Where is this money?

(ii) Where is the 750 million dollars? As things stand today, our country is paying an annual interest of Ksh14 billion on the 750 million dollars, but we don’t know what we’ve done with this money.

The government must remain alert to the fact that an overwhelming majority of Kenyans have reached the limits of belt tightening. The least they can expect from their government is clarity, probity and full disclosure on loans taken in the name of the Republic of Kenya.