• The auditor general puts Treasury on the spot over the interests.
• The public debt has been ballooning for the last seven years.
Image: ENOS TECHE
Taxpayers could have forked out Sh76 billion more as interest accrued on delayed servicing of foreign loans in the 2018-19 financial year, a report shows.
According to the Auditor General's report on the national government accounts, this was captured as payment for foreign loans.
It was after an analysis of individual loans that the auditor established that the Sh76 billion was an over-payment for interests accrued on foreign loans.
“The over expenditure has not been authorised,” Auditor General Nancy Gathungu says in her latest report.
The report reveals that taxpayers paid another Sh50.2 billion as interest on repayment of interest accrued from Treasury bonds for the same financial year.
This means that the country incurred a net loss of Sh126 billion in settling delayed interest on Treasury bonds and foreign loans.
It reveals how the government could be paying dearly for delays in meeting its domestic and foreign financial obligations, further ballooning the public debt.
The debt crossed the Sh7 trillion mark last year, or 65 per cent of GDP, up from Sh5.81 trillion the previous year.
It has been rising by almost Sh1 trillion annually in the last six years, having jumped to Sh5.04 trillion in 2018 from Sh4.41 trillion in June 2017.
The debt was Sh3.62 trillion in June 2016, Sh2.83 trillion in June 2015 and Sh2.37 trillion in June 2014.
The debt crossed the Sh7 trillion mark last year, or 65 per cent of GDP, up from Sh5.81 trillion the previous year.
It has been rising by almost Sh1 trillion annually in the last six years, having jumped to Sh5.04 trillion in 2018 from Sh4.41 trillion in June 2017.
Economists have warned that unless the government quickly renegotiates with its financiers to reschedule some huge loans, an economic recession would be inevitable.
President Uhuru Kenyatta's Jubilee administration is accused of having opted for expensive commercial loans since assuming office in 2013, plunging the country into its worst debt quagmire.
According to the 2021-22 Budget Policy Statement, Uhuru's administration will in the next financial year break the Sh9 trillion budget ceiling set by Parliament, worsening the debt burden on Kenyans.
The government is projected to borrow a further Sh930 billion, taking the total debt burden to Sh1.02 trillion by June next year, two months before Uhuru's term expires.
This means Uhuru will have borrowed slightly more than Sh6.5 trillion to finance his manifesto over 10 years since he took over power from Mwai Kibaki.
Some of the money borrowed went into building new roads, a modern railway, bridges and electricity plants, driving up borrowing to plug the budget deficit.
In the audit report, the Treasury is also on the spot for discrepancies in tax revenues.
The statement of revenues and transfers reflects tax revenue receipts of Sh1,440,830,331,255.
However, the Kenya Revenue Authority accountability statement for the period reflects tax income receipts transfers of Sh1,338,169,499,540, resulting to an unexplained net variance of Sh102,660,831,716.
“No satisfactory explanations have been rendered for the discrepancies between the two sets of records,” the auditor general says.