Sh250bn Eurobond ‘earned Sh15m interest’

By: PETER LEFTIE

The Sh250 billion Eurobond loan only earned the country Sh14.9 million interest. Documents from the Office of the Controller of Budget (CoB) show that the total amount of interest gained from both the first and the second issues was a modest Sh14 million, raising questions about the low interest rates negotiated by the government.

The documents, which were tabled before the Parliamentary Budget Committee, show that the first issue of Sh174 billion was made in June 2014 while the second issue of Sh73.8 billion was made in December 2014.

They further show that the exchange gain, as at September 8 last year, was Sh1.1 billion and Sh1.2 billion as at June 30.

EUROBOND FUNDED PROJECTS

A total of Sh196.9 billion was transferred to the Exchequer account in eight separate installments between March 7 last year and June 30 this year, says the Controller of Budget.

The difference of Sh53 billion is what was used to repay the syndicated loan, according to the documents.

Treasury CS Henry Rotich has been at pains to explain which infrastructure projects were funded by the Sh196.9 billion.

Last week, Mr Rotich circulated a statement to the media giving a breakdown of how the government shared billions among ministries to fund various infrastructure projects.

“In regard to the funding of infrastructure, the total Exchequer releases to ministries/departments/agencies was Sh196.2 billion, the available resources from the sovereign bond. Some of the projects are complete while others are ongoing,” he said.

Ministries and State departments which benefitted from the cash include State Department of Infrastructure (Sh64 billion), Ministry of Energy and Petroleum (Sh21 billion), State Department of Water and Irrigation (Sh15 billion), State Department of Planning (Sh44 billion) and State Department of Agriculture (Sh14 billion).

The CS has, however, been unable to list the specific projects the money was used to fund, fuelling speculation that the funds could have been used to pay salaries and other recurrent projects or that they could have been stolen.

SOURCE: DAILY NATION