The National Treasury has replied to news that the national and county governments had taken out more than Ksh1.3 trillion from the Central Bank of Kenya in just seven months.
Chris Kiptoo, the Principal Secretary, refuted the allegations in a statement released on Sunday, March 2, noting that stringent legal and financial procedures were followed even though the exchequer requests and withdrawals were not automated by the conclusion of the 2023–2024 fiscal year.
“A report indicating anomalies in Exchequer withdrawals, including allegations of a Ksh1.3 trillion withdrawal over seven months, was released by a segment of the media today. A portion of the statement stated, “The National Treasury wishes to clarify the facts while we await the official report from the Controller of Budget.”
“The system had not yet been automated, therefore Exchequer requests and withdrawals were handled manually until the end of the 2023–2024 fiscal year. To ensure complete conformity with public finance legislation, all withdrawals were submitted to stringent legal and financial procedures, with the Controller of Budget reviewing and approving each transaction.
PS Kiptoo went on to explain that a significant reform was initiated to automate the exchequer process on July 1st in cooperation with the CBK and the Controller of Budget (CoB).
He claimed that this was done in an effort to boost financial monitoring, increase accountability, decrease processing time, and improve efficiency.
This led to the effective transition of all national government Ministries, Departments, and Agencies (MDAs) to this automated system, where the CoB must digitally approve exchequer requests.
However, because of their unique approval process, not all of these transactions were transferred. These consist of the Judiciary Fund, the Equalization Fund, transfers to Counties, and debt payments. They are currently being onboarded.
However, the PS pointed out that even manual transactions were closely watched and had no opportunity for deviation.
“The National Treasury categorically affirms that all Exchequer withdrawals, whether processed manually or electronically, are subject to strict legal and financial oversight,” the statement said in part.
“Controller of Budget, guaranteeing complete adherence to public finance laws.” This method has never resulted in the loss or misappropriation of public funds.
The message concluded by promising to put together a more thorough response after the Controller of Budget’s formal report was available.
According to an exclusive story in the February 2 Daily Nation, both governments manually requested more than Ksh1.3 trillion to pay debt, pensions, and other expenses, avoiding the automated system.
The article claims that the National Assembly Committee on Finance and National Planning received this information via a confidential CoB study.
These transactions were reportedly completed between July 12, 2024, and February 2025.
