This archive report was first published on 3 July 2021.
Published on July 3, 2021, an audit report by the Auditor-General has cast doubt on the government's ability to recover over Sh28 billion in loans advanced to various state-owned entities.
According to the report, the National Treasury has not made serious attempts to recover the money, raising concerns that some debts could be written off.
The audit report, which covered the year to June 2020, found that Treasury had not proactively tried to recover the debts, leaving the possibility that the loans could be written off, with the taxpayer paying dearly.
State firms owe the government a total of Sh867 billion, with the 17 companies not servicing their loans accounting for Sh28.27 billion or 3.3 per cent of the loans.
Some of the entities that owe the State and have not been servicing their loans include; Coast Water Services Board, Tanathi Water Services Board, Mumias Sugar, and Lake Victoria North Water Services Board.
The Auditor-General also questioned the Government Investment and Public Enterprises (GIPE) Management's oversight role, including loans advanced to parastatals.
She noted that the GIPE Management has not been able to confirm its active role in the management of existing loan portfolio and issuance of new loans through the annual work plans and periodic monitoring and evaluation reports.
Concerns of some parastatals being unable to pay their debts to the government come as the International Monetary Fund pushes for their restructuring in the 38-month programme.
