President Uhuru Kenyatta on Thursday authorised payment of the controversial Anglo Leasing debts, saying further delays could put the country's economy at risk.
In a statement, State House Spokesperson Manoah Esipisu said Kenya had exhausted all judicial options to stop the payments following a court ruling in Geneva on the same.
The Treasury was thus instructed to pay Sh1.43 billion (US$16.4 million), which is the outstanding figure following numerous negotiations with the claimants who initially claimed Sh1.64 billion (US$18.8 million).
The president said failure to clear the debts was putting Kenya at risk of higher debts as the annual costs of non-settlement would be Sh21 billion, being the cost of higher interest rates on domestic borrowing both for the public and private sectors.
He has, however, ordered a fresh probe into the scam saying the relevant institutions should ensure the culprits face the law.
The Anglo Leasing Scandal started after contracting of a loan in December 2003 by the Department of Immigration which was then under the Office of the Vice President and Ministry of Home Affairs. The loan was intended to enhance security by modernising the issuance of secure passports and purchase of security equipment for use at Kenya’s borders.
However, the procurement process was abused and a company going by the name “Anglo Leasing and Finance Company Ltd” was awarded the tender and Sh93 million paid up-front. This became public on 4th May 2004 when the matter was raised in Parliament.
Subsequent review revealed that in the external public debt database, there were a total of 18 contracts similar to the one arranged by the Anglo Leasing and Finance Company Ltd and from then, these loan contracts were labeled “Anglo-Leasing”.
Investigations revealed that the contracting of loans similar to Anglo Leasing had been going on in the Government for a long time.
In August 2004, the Ministry of Finance suspended payments of all the loans similar to Anglo Leasing and instructed the Controller and Auditor-General to carry out a special audit.
The Public Accounts Committee (PAC) also investigated the matter and on 30th March 2006, its chairman tabled the report on “Special Audit on Procurement of Passport Issuing Equipment”. The report, which covered all the 18 contracts, was adopted by Parliament on 4th April 2006.
It recommended termination of all contracts which had not been commenced and renegotiation of those which had commenced with strict adherence to the procurement regulations and procedures. It also recommended investigation and prosecution those implicated.
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