THE BOOKS STILL DONâ€™T ADD UP:
RAILA ODINGA’s RESPONSE TO NATIONAL TREASURYâ€™S STATEMENT ON EURO BOND :
We have reviewed the document released by The National Treasury as an account of the proceeds of the Eurobond. We are gratified to note that the Government has confirmed receipt of all the Eurobond proceeds.
Other than this, the document does not respond to our questions. If anything, it reinforces our concern that this is a huge scam. We have dispatched a letter to the Treasury to that effect (Letter attached here).
We demonstrated in our letter to the National Treasury that the only way that the Government has been able to accommodate all the Ksh. 250 billion Eurobond in its budget accounts is by understating domestic borrowing for FY 2014/15 by Ksh. 140 billion, from Ksh. 250 billion to Ksh. 110 billion.
In Item 18 of the statement, The National Treasury reproduces the same entries from the budget out-turn that we used to demonstrate this, but omits the understatement of domestic borrowing.
This is mischief and desperation meant to hoodwink the public. Without the understatement of domestic revenue, the Governmentâ€™s accounts will not balance.
The National Treasury reports that the National Government FY 2014/15 development expenditure was Ksh. 508 billion, made up of Ksh. 266 billion domestically financed and Ksh. 240 billion foreign financed expenditure.
In terms of foreign financing, it shows disbursement of project and programme loans of Ksh. 220 billion and external grants of Ksh. 27 billion for a total of Ksh. 247 billion. In effect, all externally financed development expenditure is accounted for without the Eurobond.
The only item that the Eurobond proceeds financed in FY 2014/15 as per the National Treasuryâ€™s financial report is external debt amortization (repayment of principal) to the tune of Ksh. 75 billion. This and the Ksh. 35 billion the National Treasury records as spent in FY 2013/14 totals Ksh. 110 billion, leaving Ksh. 140 billion unaccounted for.
The foundation of our demand however is that it is inconceivable that so much money, over and above the other resources, to have been spent on infrastructure in one year that we cannot see, and with no discernible positive impact on the economy.
We note that The National Treasury has indicated that the project by project data is being compiled and will be released in due course. This is quite odd as project budgeting comes before aggregate budgeting.
How did the National Treasury fund projects without this information? Something has gone horribly wrong with our public financial management. Be that as it may, we await the information. In the meantime, we demand the following:
1. That the National Treasury explains these glaring accounting anomalies.
2. That a value for money audit immediately be instituted to look into the expenditures and projects funded Ministry by Ministry in which case, each ministry that received Euro Bond money should be able to explain how it was spent and show the projects the money was spent on.
HON RAILA A ODINGA; EGH
DECEMBER 4, 2015.