Concerns over missing details on Ksh 13b World Bank loan
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Parliament accuses the government of non-disclosure over missing details on Ksh 13b World Bank loan
Parliament accuses the government of non-disclosure over missing details on Ksh 13b World Bank loan.
Members of Parliament have demanded answers over a Ksh13.2 billion loan which Kenya owes World Bank as part of long-term financial agreements.
On Wednesday, August 30, the Commercial Affairs and Energy Public Investments Committee of the National Assembly highlighted that information about the loan, which was being repaid at a rate of 1.5% annually, was still lacking.
The West Pokot MP David Pkosing-led committee specifically demanded to know why the government withheld information about money that accrued on the loan due to changing dollar exchange rates.
“Contrary to Paragraph 27 of International Public Sector Accounting Standard (IPSAS) 4 – The Effects of Changes in Foreign Exchange Rates, the loan balance totaling 13,201,986,800 as at 30 June 2021, was translated to Kenya Shillings based on the exchange rate on the transaction date.
“As a result, the foreign exchange gain or loss was not disclosed in the financial statements,” the committee observed.
According to the Committee, the International Public Sector Accounting Standard requires foreign currency monetary items to be translated using the closing exchange rate, which the MPs were not sure happened.
“The accounting policy applied by the Agency in translating foreign-denominated transactions and balances was not disclosed in the notes to the financial statements as required by the accounting standard.
“In the circumstances, accuracy, completeness and fair presentation of the loan balance totaling Ksh13,201,986,800 could not be confirmed,” the statement by the committee read in parts.
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The World Bank loan, which was initially provided in 2008, was intended to finance water and sanitation services in the Coast region through the Coast Water Works Development Agency, the MPs further stated.
The committee further noted that the loan amount was Ksh4.6 billion, repayable over a 13-year period beginning on March 30, 2013, with an annual interest rate of 1.5%.
However, parliament expressed concern that they did not have the exact details of how the loan repayment had been managed by the State.
“The annual repayment of US 4,906,636 entailed a principal sum of Ksh460,631,562.00 (US$ 3,168,030) and interest of Ksh252,793,312.40 (US$ 1,738,606).
“However, records on repayment of the loan were not provided for audit verification. In addition, the repayment of Ksh713,424,874.40 (USS 4,906,636) due annually was not disclosed separately under other current liabilities in the statement of financial position as at 30 June 30, 2021,” the statement read in parts.
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