Controller of Budget (CoB) Margaret Nyakang’o has warned that the government is wasting resources on loan commitment fees as well as foreign and domestic travel.
While appearing before the National Assembly Committee on Public Debt and Privatisation, Controller of Budget Margaret Nyakang’o advised the government to cut non-essential expenditure to reduce the budget deficit and, ultimately, ease the debt servicing burden.
According to the COB, the government should focus on travel, which has consumed more than Ksh9.5 billion in the 2024/25 financial year.
“I was lucky to go to Turkey last year on an ICPAK trip, the whole room was full of Kenyans and was being facilitated by a Kenyan, so what you ask yourself is, why didn’t these people sit in Mombasa and have a Kenyan facilitate them? Did they have to fly to Istanbul?” Nyakang’o asked.
Loan Commitment Fees
Nyakang’o stated that another factor gobbling taxpayers’ money is the payment of commitment fees on loans, despite issues such as poor project readiness, delayed disbursement of funds, and inefficiencies in loan utilisation.
In the first nine months of the financial year 2024/25, Kenya paid Ksh770.5 million as commitment fees.
She explained that the loans are issued before the government plans on how to use them for development projects.
Therefore, the project implementors are often shocked when given funds to start working.
“We found out that we sign loans before the project implementors are ready so they are surprised to be told there is money here for you so can you start, they say wow we didn’t know there was money, so we have this problem where the sinking of the funds is not aligned to project readiness,” Nyakang’o said.
The move, she says, adds pressure to the debt servicing burden which if not addressed will likely lead to the country defaulting on its obligation.
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Controller of Budget Warning on Rising Salaries and Allowances
Additionally, she warned of the rising salaries, allowances and miscellaneous costs projected to grow from Ksh4.08 billion to Ksh4.67 billion.
This comes on the backdrop of reduced disbursement of pensions and gratuities.
The COB said only Ksh115 billion was disbursed against Ksh223 billion, which was provided in the first nine months of the current financial year.
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“Just when we have collected enough from KRA to pay something like pensions, you know what happens, I find six requests for article 223 people need to spend outside the budget, and they need now, today that is what article 223 means,” said Nyakang’o.
She warned that the country is staring at bigger problems if the government fails to tame all these forms of wastefulness.
“If we continue doing the wrong things then we are headed in the route of defaulting, but if we amend our ways and start doing the right thing, and I have just said if we go to the TSA, we will make massive savings and we will not need to borrow as much,” she said.
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