Rédaction Africa Links 24 with Daily Nation
Published on 2024-02-07 16:43:54
According to a forensic audit by Auditor-General Nancy Gathungu, top National Treasury officials withdrew Sh6.3 billion from the Consolidated Fund without the approval of Parliament. This money was used to purchase shares in two African banks during the last year of former President Uhuru Kenyatta’s administration. The government, through the National Treasury, acquired shares in Eastern and Southern African Trade Development Bank and Africa-Export Import Bank (AFREXIMBANK) totaling Sh6,309,955,118. The purchase of these shares was made in the financial year 2022/23.
The Auditor-General pointed out that the National Treasury exploited the provisions of Article 223 of the Constitution, which allows the national government to spend money that has not been approved by the Parliament if an amount appropriated for any purpose by the National Assembly is either insufficient or a need has arisen for a purpose for which no amount has been budgeted for. However, the full details on the shareholding of AFROEXIMBANK were received after the special audit report had already been submitted to the National Assembly. The Auditor-General also mentioned that the Treasury did not respond to their request for information on the shareholding of the Eastern and Southern African Trade Development Bank, making it difficult for them to confirm the purchase of shares and to determine whether any benefits may have accrued to the government of Kenya from these investments.
In addition, the Auditor-General’s report revealed that there were requests by five Ministries, Departments, and Agencies (MDAs) that were approved by the Controller of Budget but were not disclosed in the information submitted by the National Treasury. These requests amounted to Sh5.13 billion for recurrent expenditure and Sh2.8 billion for development expenditure. Furthermore, six MDAs incurred expenditures totaling Sh47.24 billion over and above the amount approved by the National Treasury as additional funding granted under Article 223 of the Constitution.
The controversy surrounding the use of Article 223 by the National Treasury has raised concerns within the National Assembly. The Controller of Budget Margaret Nyakang’o revealed that she refused to authorize the withdrawal of Sh6.09 billion to buy out Helios Investment Partners in Telkom Kenya, a deal that made the company fully State-owned. The transaction lacked parliamentary approval and was closed just four days before the August 9, 2022, General Election. This raised questions about the timing of the deal, as it came at the height of political campaigns to succeed former President Uhuru Kenyatta.
The Special Report on the Supplementary Budget Expenditure, including withdrawals under Article 223, was presented before the National Assembly’s Public Accounts Committee (PAC) by Mr. Sylvester Kiini, the Deputy Auditor General. The PAC had requested the Auditor-General to undertake a forensic audit on all withdrawals incurred under Article 223 of the Constitution. The committee expressed concerns about the increase in requests for funding under Article 223 and emphasized the need for mechanisms to regulate the spending of money under this provision.
Overall, the issues surrounding the use of Article 223 of the Constitution for government expenditures, including the purchase of shares in African banks, have sparked significant debate and scrutiny within the National Assembly. The concerns raised by the Auditor-General’s report have prompted discussions about the need for stricter regulations and transparency in the budgeting and procurement processes related to supplementary expenditure incurred under Article 223. The committee has urged the Auditor-General to ascertain the authenticity, effectiveness, and nature of supplementary expenditure incurred and to establish whether the approval of the monies used was sought in accordance with the constitutional provisions.
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