Kenya’s Auditor-General has flagged a Ksh1 billion ($9.1 million) debt allegedly owed by Telkom Kenya to the Communications Authority of Kenya (CA), which the company denies. The discrepancy emerged during an audit of the regulator’s 2020 financial records, revealing provisions for the debt alongside Ksh2.7 billion ($24.55 million) in other receivables.
According to Auditor General Nancy Gathungu’s report, the CA recognized Ksh1.07 billion ($9.1 million) in liabilities from Telkom Kenya, split into Ksh292 million ($2.65 million) in general provisions and Ksh780 million ($7.09 million) in specific provisions. Telkom Kenya refuted the claim in a December 21, 2020, letter, stating no outstanding debt existed but failing to provide reconciliation details for audit review.
The report also highlighted the National Treasury’s allocation of funds for frequency spectrum fees in the 2020/21 financial year, despite the CA’s full provisioning for bad debt. Gathungu noted the inability to verify the accuracy of Ksh310.82 million ($2.83 million) in non-exchange transaction receivables as of June 30, 2020.
This audit follows the collapse of merger talks between Telkom Kenya and Airtel Kenya in 2020. The proposed joint venture, announced in February 2019, aimed to challenge Safaricom’s market dominance but stalled after the National Treasury rejected the deal. Airtel cited regulatory hurdles and shifting market dynamics, including increased internet demand during the pandemic, as reasons for terminating negotiations.
