Home Business Treasury refutes Controller of Budget report on costly loans

Treasury refutes Controller of Budget report on costly loans

National Treasury and Economic Planning Prof. Njuguna Ndung'u. PHOTO | File

The National Treasury has termed remarks by the Controller of Budget that some of the loans taken from the International Monetary Fund (IMF) and the World Bank attract high interest rates of up to 14.5pc.

The National Treasury and Economic Planning Cabinet Secretary Prof. Njuguna Ndung’u termed the remarks as sensational and inaccurate.

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“Contrary to the Controller’s remarks, Kenya does not hold any loans from the IMF and the World Bank with interest rates as high as 14.5pc. A cursory examination of both the multilaterals’ websites clearly reveals that their lending products range from 0pc to a maximum of approximately 6.74pc (Secured Overnight Financing Rate +1.44pc),” said Ndung’u.

In a statement, Prof. Ndung’u said the remarks by CoB Margaret Nyakang’o risk causing confusion among Kenyans and straining the relationships with valuable development partners and foreign investors.

Treasury’s official data indicate that the country currently holds IMF debt to the tune of $2.68 billion with interest ranging from between 0pc to 6.07pc per annum.

On the other hand, debt to the World Bank under the concessional International Development Assistance (IDA) window stands at $11.3 billion attracting interest of between 0.35pc and 1.39pc annually.

“It is important to note that the Controller of Budget has the access to all loan contracts and underlying documentation maintained in the Public Debt Management Office,” he stated.

Treasury further says the documents along with other payment details, loan registers, statements undergo annual audits by the Office of the Auditor General, same as utilization of loan proceeds

“We urge the Controller of Budget to disseminate factual information to the public to uphold the integrity of the Constitution Officer,” he added.

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