Former Chief of the Kenya Defence Forces (KDF) General (Rtd) Jeremiah Kianga and former Defence permanent secretary Zachary Mwaura have been entangled in the procurement of fighter jets worth Sh2.9 billion from Jordan, which were later found to be defective.
The Public Accounts Committee (PAC) heard that the aircraft, bought more than ten years ago from Royal Jordan Air Force for $29 million (Sh2.9 billion at current exchange rates), are now being used as spare parts for A-5 fighter jets.
Defence principal secretary Saitoti Torome and Vice Chief of KDF Robert Kibochi for the second time managed to exclude the public from the hearing, arguing that the matter was classified and could not be discussed in the open.
PAC chairman Opiyo Wandayi demanded to know the Defence PS and the Chief of KDF at the time the seven fighter jets were procured.
“We want to know who was the accounting officer in the ministry and the Chief of Kenya Defence Forces in line with Article 226(5) of the Constitution, which is clear on responsibility. We want to know this so that we can apportion blame if it is found that public money was applied wrongfully. Who were the PS and the CDF at the time this procurement was undertaken?” Mr Wandayi asked.
He read a section of the Constitution that stipulates that if the holder of a public office, including a political office, directs or approves the use of public funds contrary to law or instructions, they are liable for any loss arising from that use and shall make good the loss, whether they remain the holder of the office or not.
“The PS then was Mr Zachary Mwaura and the Chief of Defence Forces was General Jeremiah Kianga. He is long retired. Mr Mwaura and General Kianga served during the years 2007 to 2009,” Mr Torome said. Asked whether General (Rtd) Kianga was still in public service, Lieutenant General Kibochi said he had left public office after serving as chairman of Kenya Railways.
“He was the chair of Kenya Railways Corporation, but has since left,” Lt- Gen Kibochi said.
Mr Torome told the committee that the purchase of military hardware was a sensitive matter.
“Like we argued last time we handled this audit query, the ministry views this as a sensitive security matter and we are requesting that the issue be handled under classified information category,” Mr Torome said during the scrutiny of Ministry of Defence books of accounts for the year to June 2015.
Auditor -General Edward Ouko, in his audit report dated March 16, 2017, had questioned the purchase of defective fighter jets that he said were being used as spare parts.
The KDF procured the seven aircraft 10 years ago through government-to-government negotiations in 2007.
The purchase price of the aircraft recorded in contract No. RJAF/KAF/2007 dated April 26, 2007 was US$15,291,503.
Mr Ouko said technical assistance and maintenance services recorded in agreement No JAC/COMM02/184-GOK dated April 27, 2007 were procured at $12,264,995. A direct procurement of supplementary services for the fleet recorded in contract MOSD/JAC/SUPPL/01/2008 was signed on January 30, 2009 for a sum of $2,883,561, Mr Ouko said.
“An audit verification of the aircraft was carried out in June 2016 at Laikipia Air Base and…audit of fuel and servicing records indicate that seven aircraft have not been in operation from the time they were procured,” said Mr Ouko.
Before the media was locked out of the Friday meeting, Mr Wandayi told the Defence ministry officials to provide details of individuals who sanctioned the procurement of the defective jets. He directed Mr Torome and Lt-Gen Kibochi to provide the names of persons who sat in the ministerial tender committee (MTC), minutes that approved the procurement of the jets through restricted tendering and the technical acceptance documents.
Mr Wandayi also asked them to provide a list of individuals who participated in the government-to-government negotiations leading to the procurement of the jets.
He demanded a written response on the reasons that led to the procurement through government-to-government instead of the KDF procuring the aircraft on its own behalf since it has the technical capabilities.
“In the old Procurement and Asset Deposal Act, 2005, there is no provision for government-to- government. Kindly guide us on what law you used to procure these aircraft,” Mr Wandayi said. A Mr C. K Muhia, the chief finance officer in the Ministry of Defence, used restricted tendering to procure the aircraft since they were security hardware.
World Bank pushes G-20 to extend debt relief to 2021
World Bank Group President David Malpass has urged the Group of 20 rich countries to extend the time frame of the Debt Service Suspension Initiative(DSSI) through the end of 2021, calling it one of the key factors in strengthening global recovery.
“I urge you to extend the time frame of the DSSI through the end of 2021 and commit to giving the initiative as broad a scope as possible,” said Malpass.
He made these remarks at last week’s virtual G20 Finance Ministers and Central Bank Governors Meeting.
The World Bank Chief said the COVID-19 pandemic has triggered the deepest global recession in decades and what may turn out to be one of the most unequal in terms of impact.
People in developing countries are particularly hard hit by capital outflows, declines in remittances, the collapse of informal labor markets, and social safety nets that are much less robust than in the advanced economies.
For the poorest countries, poverty is rising rapidly, median incomes are falling and growth is deeply negative.
Debt burdens, already unsustainable for many countries, are rising to crisis levels.
“The situation in developing countries is increasingly desperate. Time is short. We need to take action quickly on debt suspension, debt reduction, debt resolution mechanisms and debt transparency,” said Malpass.
Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans
The Central Bank of Kenya (CBK) will regulate interest rates charged on mobile loans by digital lending platforms if amendments on the Central bank of Kenya Act pass to law. The amendments will require digital lenders to seek approval from CBK before launching new products or changing interest rates on loans among other charges, just like commercial banks.
“The principal objective of this bill is to amend the Central bank of Kenya Act to regulate the conduct of providers of digital financial products and services,” reads a notice on the bill. “CBK will have an obligation of ensuring that there is fair and non-discriminatory marketplace access to credit.”
According to Business Daily, the legislation will also enable the Central Bank to monitor non-performing loans, capping the limit at not twice the amount of the defaulted loan while protecting consumers from predatory lending by digital loan platforms.
Tighter Reins on Platforms for Mobile Loans
The legislation will boost efforts to protect customers, building upon a previous gazette notice that blocked lenders from blacklisting non-performing loans below Ksh 1000. The CBK also withdrew submissions of unregulated mobile loan platforms into Credit Reference Bureau. The withdrawal came after complaints of misuse over data in the Credit Information Sharing (CIS) System available for lenders.
Last year, Kenya had over 49 platforms providing mobile loans, taking advantage of regulation gaps to charge obscene rates as high as 150% a year. While most platforms allow borrowers to prepay within a month, creditors still pay the full amount plus interest.
Amendments in the CBK Act will help shield consumers from high-interest rates as well as offer transparency on terms of digital loans.
Scope Markets Kenya customers to have instant access to global financial markets
NAIROBI, Kenya, Jul 20 – Clients trading through the Scope Markets Kenya trading platform will get instant access to global financial markets and wider investment options.
This follows the launch of a new Scope Markets app, available on both the Google PlayStore and IOS Apple Store.
The Scope Markets app offers clients over 500 investment opportunities across global financial markets.
The Scope Markets app has a brand new user interface that is very user friendly, following feedback from customers.
The application offers real-time quotes; newsfeeds; research facilities, and a chat feature which enables a customer to make direct contact with the Customer Service Team during trading days (Monday to Friday).
The platform also offers an enhanced client interface including catering for those who trade at night.
The client will get instant access to several asset classes in the global financial markets including; Single Stocks CFDs (US, UK, EU) such as Facebook, Amazon, Apple, Netflix and Google, BP, Carrefour; Indices (Nasdaq, FTSE UK), Metals (Gold, Silver); Currencies (60+ Pairs), Commodities (Oil, Natural Gas).
The launch is part of Scope Markets Kenya strategy of enriching the customer experience while offering clients access to global trading opportunities.
Scope Markets Kenya CEO, Kevin Ng’ang’a observed, “the Sope Markets app is very easy to use especially when executing trades. Customers are at the heart of everything we do. We designed the Scope Markets app with the customer experience in mind as we seek to respond to feedback from our customers.”
He added that enhancing the client experience builds upon the robust trading platform, Meta Trader 5, unveiled in 2019, enabling Scope Markets Kenya to broaden the asset classes available on the trading platform.