The National Treasury Wednesday maintained that the proceeds of the Sovereign Bond and the Tap Sales were used to fund part of the development budget for the financial years 2013/14 and 2014/15.
It said only three transactions were carried out on each of the offshore accounts used for transacting the Eurobond money including repayment of the syndicated loan, expenses relating to the issuance of the Sovereign Bond and the Tap Sales and the transfer of the balance to the Consolidated Fund.
“All the proceeds of the Sovereign Bond issued in June, 2014 and the Tap Sales issued in December, 2014 were fully accounted for and were transferred to the CBK, from where the authority to withdrawal funds was sought and provided by the Controller of Budget,” The Treasury said.
It added: “The Auditor-General has confirmed that all funds have been accounted for. In addition, it is clear that the purpose for which the Sovereign Bond and the Tap Sales were issued were met, namely, to diversify our external sources of funding government programmes/ projects; to achieve lower interest rates; build-up of international reserves; stabilise the Kenya shilling and inflation.”
It said the net proceeds of the Eurobond were credited to Kenya Government’s US-dollar accounts account in JP Morgan Chase Bank in New York, Account Number 603149985, while further proceeds from the Sovereign Bond Tap Sales were credited to Kenya Government Account in Citibank, also in New York, account number 36341018.
“The GOK/CBK Sovereign Bond Account held with JP Morgan Chase Bank, New York was operated by the National Treasury in conjunction with the Central Bank of Kenya (CBK) as the Government fiscal agent.
“In this respect, the National Treasury designated two signatories to the account with respect to the GOK/CBK Sovereign Bond Account and the Sovereign Bond Tap Sales. The National Treasury signatories were the accountant-general and deputy accountant-general,” the Treasury explained.
OPEN TO SCRUTINY
Treasury’s comprehensive information on the spending of the Sh250 billion Eurobond proceeds, follows Opposition leader Raila Odinga’s claims that the money was misappropriated thus calling for financial transparency. But the Treasury has denied these allegations.
The Treasury explained that Mr Odinga’s allegations were based on a “misinterpretation” of figures in the Budget Review and Outlook Paper (BROP) and the Budget Policy Statement (BPS).
“Out of the total Sh250 billion of the sovereign bond, Sh35 billion (shown as commercial financing) was utilised in fiscal year 2013/14 and the remaining Sh140.5 billion from the initial sovereign bond and the Sh75 billion from the tap sales were used in FY 2014/15. It is clear therefore that the total of these amounts (35+140+75) is the total amount of the bond proceeds. Therefore, there is no missing Sh141 billion,” it said.
Treasury Principal Secretary Kamau Thugge said that the Ministry remains open to scrutiny, and that the meeting sought by the Cord leader “to issue clarifications” on the spending of the Eurobond money was still on.
