Home / Blog / Public Spending : Kenya’s Controller of Budget Agnes Odhiambo queries source of Sh17 billion used to service debt
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The Office of the Controller of Budget has raised queries on the source of an extra Sh17 billion used to service Kenya’s public debt in the first quarter of the current financial year.

According to a report released by Controller of Budget Agnes Odhiambo reviewing the national government’s implementation of the 2014/2015 budget, the amount of money paid out to service the country’s domestic and foreign debt exceeded budgetary allocation by Sh17.1 billion in the first quarter. “During the period under review, cumulative exchequer cash amounting to Sh118.8 billion was released to service public debt. Actual expenditure on servicing public debt obligations was Sh135.9 billion,” reads the report in part. “This actual expenditure exceeded exchequer issues by Sh17.1 billion and it is necessary to undertake an urgent reconciliation and verification of the Public Debt account to explain this difference.” Kenya’s public debt currently stands at Sh2.3 trillion, comprising Sh1.2 trillion and Sh1.1 trillion for both domestic and foreign debt respectively. In the first quarter of the 2014/2005 financial year, a total of Sh110.4 billion was approved towards repayment of the domestic debt with Sh29.0 billion of this meant for interest payment. However, the amount of interest payment made out was Sh34.7 billion, representing a Sh5.7 billion increase compared to the amount approved. In terms of foreign debt paid out, Sh8.3 billion comprising Sh6.1 billion and Sh2.2 billion for principal and interest payments respectively was approved.

However, actual expenditure amounted to Sh63.7 billion with Sh59.8 billion for principal and Sh3.9 billion for interest repayment. Although a Sh53.8 billion syndicated loan repayment from Sovereign Bond proceeds partly explains this difference, the Controller of Budget says there is need to undertake an urgent reconciliation and verification of the foreign debt account to explain any other difference. This discrepancy in the amount of debt instalment paid out in the first quarter of the current financial year is just one of several concerns that the budget office raised in its latest review report. Several ministries and departments including the Independent Police Oversight Authority, Commission for the Implementation of the Constitution, National Gender & Equality Commission and the Witness Protection Agency are yet to adopt the Government-sponsored Integrated Financial Management Information System, IFMIS. HUMAN RIGHTS Others include the Ethics and Anti-Corruption Commission, National Intelligence Service, Teachers Service Commission, Ministry of Defence, and Kenya National Human Rights Commission. The IFMIS is supposed to automate and centralise Government procurement and financial management processes in all ministries and counties. However, the system launched at a high-profile event led by President Uhuru Kenyatta and his deputy earlier this year, has been snubbed by several ministries and counties. The Controller of Budget has stated that the failure of the said Government ministries and departments to adopt IFMIS makes the process of auditing and financial reporting difficult.

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