Crack down on reckless borrowing by Treasury

Some top officials assigned important national responsibilities have been behaving badly. While some fail to deliver due to inefficiency, others deliberately manipulate systems for personal gain. The rampant corruption in the public sector is a costly burden.

It is disappointing that the mess continues despite being routinely exposed. The Auditor-General’s reports often lay bare the shenanigans, but the officials concerned go scot-free and when they leave office, their successors carry on with the racket.

Auditor-General Nancy Gathungu’s latest report has revealed that there are no projects to show for the Sh1.13 trillion in expensive loans that the government took in nearly 12 years to 2021, some of them illegally. This borrowing exposed the country to huge risks and yet the officials concerned just went ahead as if nothing had happened.

It is unforgivable that the mess occurred under the watch of the National Treasury, which should, ideally, have the most competent officials monitoring these transactions to ensure that they are above board and valuable. The Treasury takes charge of this delicate portfolio of managing public finances and must discharge its responsibilities with utmost efficiency.

The audit report has revealed that the National Treasury took 13 expensive loans and sovereign bonds between July 2010 and December 2021. But the loans were used to settle recurrent government expenditures, in a flagrant violation of the law. And there is no tangible evidence that these hefty loans were ever used to finance development projects.

The audit has established that 26 of the 39 loans were also taken without seeking the requisite advice from the Attorney-General, contrary to the law.

As if that was not bad enough, the audit also revealed discrepancies in loan records held by the Treasury, which have not been explained to date. Of special concern is the use for the expensive commercial debts for recurrent expenses. This is a violation of the Public Finance Management (PFM) Act, 2012.

The Treasury should not only adhere to the law in its operations, it must also enhance accountability. But most importantly the culprits, including those who have already left government employment, must be sanctioned.