Kenya has lost over Ksh 4.3 billion in avoidable interest charges due to delayed payments on 15 government projects, according to a new report by Auditor General Nancy Gathungu.
The report reveals that interest penalties were incurred on loans taken for key projects in health, water, roads, and irrigation sectors. Gathungu blamed the losses on poor financial planning and failure by state departments to settle payments on time.
The Covid-19 Health Emergency Response project was the hardest hit, with interest charges amounting to Ksh 930.59 million due to delayed payments for vaccine supplies.
Several major road projects under the Kenya National Highways Authority (KeNHA) were also flagged. The Kibwezi-Mtomo-Kitui-Migwani Road, funded by Exim Bank, attracted Ksh 614.2 million in interest. The Sirare Corridor project along Isebania-Kisii-Ahero saw two contractors claim Ksh 657 million for delayed payments.
In the irrigation and water sectors, delays in the Mwea Irrigation Development Project resulted in Ksh 43.1 million in penalties, while the Coastal Regional Water Project was charged Ksh 178.6 million.
Smaller projects were not spared. The Roads 2000 Phase Two in Central Kenya had an interest claim of Ksh 3.6 million, and an arbitration fee of Ksh 1.2 million after a Ksh 30.9 million payment delay.
“These are losses that could have been avoided through better financial discipline and timely payments,” Gathungu stated.
The findings are likely to spark public outrage as the country continues to grapple with debt and a growing fiscal deficit. The Auditor General has called for urgent reforms to prevent further waste of public funds.
