The government is under fire for squandering Kshs 770.5 million on commitment fees for undisbursed loans, with members of parliament calling it a reckless misuse of taxpayer money.
Hon. Aden Daudi (Wajir East) led the charge, questioning why Kshs 1.1 trillion worth of loans remain idle, despite taxpayers footing the bill for unused funds.
“We’ve got Kshs 1.1 trillion worth of loans lying idle. Shouldn’t we either push for their disbursement or cancel them altogether?” he asked.
Controller of Budget Dr. Margaret Nyakang’o acknowledged the wastage, blaming poor coordination and premature loan signings.
She revealed that projects are often greenlit before the implementing agencies are prepared, resulting in double financial penalties—Commitment fees on one hand and interest payments on the other.
“We’re paying for loans we haven’t even touched. It’s unacceptable,” Dr. Nyakang’o admitted, calling for tighter planning and alignment between borrowing and project readiness.
The Committee has now directed Dr. Nyakang’o to compile a detailed report on Commitment fees, with a full breakdown identifying the ministries and departments responsible for holding up disbursements.
