Parliament’s Public Accounts Committee (PAC) has placed the National Treasury on the spot over more than KSh 60 billion in questionable expenditures, including on-lent loans to Kenya Airways and the KSh 6.196 billion Telkom Kenya buyout, all flagged in the latest Auditor-General’s report.
MPs met at Bunge Tower on Tuesday, demanding clear explanations on why billions were disbursed without signed loan agreements, repayment guarantees, or parliamentary approval as required by law.
Kenya Airways Loans Raise Accountability Concerns
According to the Auditor-General, the Treasury advanced KSh 41.27 billion to Kenya Airways between 2019 and 2022 without formal loan agreements. By December 2022, accumulated interest and penalties had pushed the outstanding exposure to KSh 43.048 billion.
The Government also paid KSh 12.326 billion on behalf of the national carrier to settle a defaulted foreign loan, including KSh 7.8 billion spent under Article 223, which allows emergency expenditure but requires later parliamentary approval.
An Auditor-General representative told lawmakers that there was no documentation showing how Treasury intends to recover the funds, warning that the recoverability of KSh 55.37 billion owed by the airline “could not be confirmed.”
PAC Vice Chairperson Amina Udgoon Siyad expressed concern over the irregularities, stating:
“We are dealing with very serious questions of accountability. The audit exposes gaps that put public money at risk.”
KSh 6.2Bn Telkom Kenya Buyout Declared Irregular
The Committee also questioned the Treasury’s KSh 6.196 billion acquisition of a 60% stake in Telkom Kenya, executed under Article 223 without seeking Parliament’s approval.
Funyula MP Wilberforce Oundo said the move violated public finance laws.
“You cannot spend over six billion shillings and then hope Parliament will rubber-stamp it afterwards,” he said.
The Auditor-General told PAC that the Telkom transaction lacked proper verification, adding:
“Parliament’s approval is not optional. Without it, the transaction remains irregular.”
Audit Flags Wasteful Expenditure
The report further highlighted wasteful spending resulting from delayed contractor payments, where Treasury admitted to owing KSh 235.6 million. Slow action led to a court awarding KSh 327.19 million, including KSh 97.27 million in interest and legal costs.
PAC Demands Full Documentation
The Committee directed the Treasury to produce:
- All loan agreements with Kenya Airways
- Repayment and recovery frameworks
- Full Article 223 justification documents
- Documentation supporting the Telkom Kenya transaction
PAC insisted that transparency is non-negotiable, reinforcing Parliament’s mandate to safeguard public funds.