Audit flags Sh30bn Eurobond breach as government defaults on security loans
Auditor-General says move by the National Treasury is a violation of the law...
✨ Key Highlights
An audit by Auditor-General Nancy Gathungu has revealed that the National Treasury illegally diverted Sh30 billion in Eurobond proceeds to cover domestic debt shortfalls, violating the bond's subscription agreement.
- Sh30 billion in Eurobond proceeds were used to cover Treasury Bond shortfalls.
- The National Treasury and Auditor-General Nancy Gathungu are key entities involved.
- The government also defaulted on five bilateral loans for security contracts totaling Sh15.42 billion as of June 30, 2025.
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Sh1.3trn of Kenya's Sh4.8trn Budget Goes to Debt Repayment - May 2026
Kenya's Sh4.8 trillion budget for fiscal year 2026/27 faces significant strain, with Sh1.3 trillion allocated to debt repayment, impacting development spending. An audit by Auditor-General Nancy Gathungu revealed that the National Treasury illegally diverted Sh30 billion in Eurobond proceeds to cover domestic debt shortfalls, violating the bond's subscription agreement. The proposed Finance Bill 2026 is set to end tax relief for Kenya Airways and significantly expand the digital tax net. Separately, the Kenyan government proposed a new 5 percent tax on imported second-hand clothing, known as mitumba, under the draft Finance Bill 2026.
