A damning parliamentary report reveals major deficiencies in Kenya’s management of external loans from May 2022 to April 2023, citing violations of reporting requirements, lack of transparency, and failure to disburse funds for critical development projects.
The Public Debt and Privatization Committee report reviews 19 loans totaling KES 213 billion signed during the period. However, only KES 24.2 billion were partially disbursed to date, marking a “disbursement rate of around 11%,” the report states.
Undisbursed loans included KES 65.3 billion from the World Bank for regional economic statistics and KES 26.4 billion for agricultural value chains. Also undisbursed was a KES 16.7 billion shilling World Bank loan for groundwater access in drought-prone counties.
| Loan | Amount (Billions Ksh) | Creditor | Purpose | Disbursement |
|---|---|---|---|---|
| East Africa Skills Transformation and Regional Integration Loan | 65.3 | World Bank | Regional economic statistics | Undisbursed |
| De-Risking, Inclusion and Value Enhancement of Pastoral Economies | 15.67 | World Bank | Pastoralist development | Undisbursed |
| National Agricultural Value Chain Development Project | 26.4 | World Bank | Agricultural value chains | Undisbursed |
| Syndicated Short-Term Multicurrency Facility | 36.18 | Trade Development Bank | Budget support | Partially disbursed |
| Micro, Small or Medium Enterprises Sector Program Support | 3.62 | Khalifa Fund | SME development | Undisbursed |
| Competitiveness & Economic Recovery Support Program | 10.52 | African Development Bank | Budget support | Unknown |
| Horn of Africa Groundwater for Resilience Project | 16.67 | World Bank | Water access | Undisbursed |
| Maternal and Newborn Care Unit Upgrading | 2.65 | Mizuho Bank Europe | Healthcare infrastructure | Undisbursed |
| Building Resilience for Food and Nutrition Security | 5.06 | African Development Fund | Food security | Partially disbursed |
| Rural Kenya Financial Inclusion Facility | 2.59 | IFAD | Financial inclusion | Partially disbursed |
| Food Security and Youth Employment Project | 4.25 | Germany | Climate resilience | Undisbursed |
| Entrepreneurship and Employment Program | 3.55 | Germany | Youth employment | Undisbursed |
| Informal Settlements Improvements Project | 6.16 | French Development Agency | Urban development | Undisbursed |
| Olkaria Geothermal Power Plant Upgrading | 6.71 | Germany | Energy infrastructure | Unknown |
| Syndicated Term Loan Facility | 27.57 | Citibank, Rand Merchant Bank, Standard Bank, Standard Chartered Bank | Budget support | Unknown |
| Isiolo – Mandera Road Upgrading | 9.65 | African Development Bank | Transport infrastructure | Unknown |
| Isiolo – Mandera Road Upgrading | 18.31 | African Development Fund | Transport infrastructure | Unknown |
| Total | 213.24 |
Committee Chairman Abdi Shurie asserted in the report that non-disbursement of loans intended for “infrastructure, energy, education, and other projects with high social impact” implies “project benefits may not be realized when loan repayments begin.”
Shurie added that loan repayments will start coming due beginning 2025 and peak in 2027 and 2047, “increasing refinancing pressure.”
The report strongly criticizes the National Treasury for violating legal requirements to report details on the loans.
“The submitted reports lack project-specific information required to guide policymaking and oversight, which indicates low levels of transparency and accountability,” the report states.
The report states that the Treasury failed to provide “loan balances brought forward, carried down, drawings and amortizations,” and did not follow proper quarterly fiscal year reporting cycles.
There was also no data on non-performing loans charged to government entities worth KES 218.8 billion as of June 2022, the report says.
The committee made 12 recommendations including full legal compliance on reporting, prioritizing concessional loans, enhancing project appraisals, and digitalizing loan processes to improve transparency.
The hard-hitting report comes as Kenya faces surging public debt, now standing at over KES 9.6 trillion as the government continues acquiring external loans for infrastructure projects.
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