The National Assembly on Tuesday confronted the Treasury over revelations that billions of shillings were disbursed to Kenya Airways over four years without formal agreements. MPs expressed alarm at the lack of proper documentation, raising questions about the protection of public resources and the processes behind the loans.
The Public Accounts Committee (PAC), chaired by Vice Chairperson and Garissa County Woman Representative Amina Udgoon Siyad, scrutinized the Auditor General’s report, which highlighted irregular spending, unapproved transactions, and potential losses of taxpayer money. The audit revealed that the airline received Sh10 billion in 2022/2023 as an on-lent loan, taking the total funding between 2019 and 2023 to Sh41.27 billion.
“We are dealing with very serious questions of accountability. These are huge sums of public money, and Kenyans deserve clear answers on where their taxes are going,” Amina said, pressing Treasury officials for explanations.
Committee members were concerned to learn that loans had been advanced before any legal agreements were signed, leaving taxpayers’ money at risk.
“This Committee finds it unacceptable that billions were released without any signed agreements. How does the Treasury justify lending public money informally?” Amina questioned.
The Auditor General’s report showed that by December 2022, accrued interest and penalties had raised the total debt to Sh43.048 billion. MPs also heard that the government had settled Sh12.326 billion on Kenya Airways’ behalf for a defaulted foreign loan, including Sh7.8 billion under Article 223.
“We did not see any documentation showing how the Treasury intends to recover these amounts from Kenya Airways. There is no repayment plan, no security offered, and no formal agreement,” an Auditor General representative told PAC.
The audit concluded that the recoverability of Sh55.37 billion owed by the airline “could not be confirmed,” fueling fears that taxpayers may ultimately bear the losses.
PAC further examined the Treasury’s Sh6.196 billion expenditure to acquire a 60 per cent stake in Telkom Kenya through Article 223. Parliament had not sanctioned the spending, prompting strong criticism from lawmakers.
“This is a clear breach of the law. You cannot spend over Sh6 billion and then hope Parliament will rubber-stamp it afterwards,” Funyula MP Wilberforce Oundo said.
The Auditor General added that the legitimacy of the entire transaction could not be verified, stating, “Parliament’s approval is not optional. Without it, the transaction remains irregular.”
The committee also flagged wasteful spending arising from delayed payment to a contractor, which resulted in Sh97.27 million in interest and legal fees. The Ministry had acknowledged owing Sh235.6 million, but late payment led to a court-awarded total of Sh327.19 million.
“This is a classic case of negligence. Taxpayers should not bear the burden of interest and legal fees that could have been avoided with timely action,” Amina remarked.
PAC directed the Treasury to submit all related documents, including loan agreements, repayment strategies, and justification for invoking Article 223.
“We want to see the loan agreements, the repayment frameworks, and the justification for invoking Article 223. If this paperwork does not exist, then someone must take responsibility,” Amina warned.
