Nairobi — Kiharu MP Ndindi Nyoro has issued a blistering warning over what he termed Kenya's dangerous slide into opaque fiscal practices, accusing the National Treasury of engaging in off-budget borrowing.
Nyoro singled out what he described as mortgaging key revenue streams, and rushed sale of a 15 per cent stake in Safaricom PLC.
Speaking Monday during the release of the Okoa Uchumi Report, a public audit led by The Institute for Social Accountability (TISA), Nyoro said Kenya was "treading the path of Senegal," which recently plunged into a debt crisis linked to hidden liabilities and shadow financing arrangements.
Nyoro claimed the government had already borrowed Sh175 billion outside the approved national budget, allegedly secured against future fuel levy collections.
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"We have borrowed Sh175 billion already. What we have done is mortgage the fuel levy for the next 15 years," Nyoro said.
"When you put all that borrowing together, we are following the script of Senegal."
He also criticised the government's plan to sell part of its Safaricom shareholding, arguing that the valuation and sale process lacked transparency and risked shortchanging taxpayers.
Nyoro cited past valuations placing Safaricom's worth at Sh1.8 trillion, questioning how its stake could now be sold at a significantly lower implied value.
"Every investor looks at intrinsic value. If a plot worth Sh450,000 is developed and starts earning rent, how do you sell the same plot plus the building four years later for Sh340,000? Is that possible?" he posed.
Nyoro insisted the government must invite competing bids if there is no "self-interest or incompetence" influencing the transaction.
"Open the process. Let the current buyer bid. Let another telco bid. Give Kenyans a chance to bid, because we will realize better value when the process is open," he said.
Flawed negotiations
He further alleged that individuals who are not government employees participated in negotiations with prospective buyers -- claims he said he was prepared to substantiate.
Nyoro accused the Treasury of weakening Kenya's negotiating position by publicly declaring financial distress.
"The CS has been on TV saying we are desperate and need to raise money. You cannot brand yourself desperate and then negotiate a major sale," he said.
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He described Treasury CS John Mbadi as merely "a spokesman" for a deal he claimed the CS was not directly involved in negotiating.
Nyoro added that the government was increasingly relying on securitisation -- collecting money in advance by pledging future revenues.
He cited several examples, including the securitisation of fuel leavy to the tune of Sh175 billion and Sports Fund (Sh44.5 billion),
Nyoro also claimed the government had moved to securitise the Housing levy saying the Treasury was "in the process of securitising" of mortgaging future collections
He warned that securitisation could burden future generations and undermine Parliament's oversight of public finances.
"We are creating two budgets -- one for recurrent expenditure and another off the books for development. The Infrastructure Fund is simply privatisation of assets and more borrowing," he said.
The National Treasury is yet to respond to Nyoro's claims.
