Statement Delivered to the Budget and Appropriation Committee of the National Assembly on 13thjune, 2013, by Mr. Henry K. Rotich, Cabinet Secretary for the National Treasury, Republic of Kenya.


1ST JULY, 2013 TO 30TH JUNE, 2014


1.1. Overview

1. Hon Members, it is a great honour and privilege to present the highlights of the first budget of the Administration of H.E the President, Hon Uhuru Kenyatta, in accordance with section 40 (1) and (2) of the Public Finance Management Act, 2012, and Standing Order No.241 of the National Assembly.

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Report of the Parliamentary Select Committee on the Decline of the Kenya Shilling Against Foreign Currencies – February 2012

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Another Reason Prof. Njuguna Ndungu Should Be Sacked

Another reason Prof. Njuguna Ndungu should be sacked:

Apart from failing to inspire confidence in the financial sector that the Central Bank can stabilize the Kenyan shilling there is another reason for Prof. Njuguna Ndungu to leave office as Governor of the Central Bank of Kenya.  He is clearly debarred from continuing in office under Chapter 6 of the Constitution having been found guilty of lying to the public and official institutions about the notorious sale of the Grand Regency Hotel.

The Cockar Report prepared after the hearings by the Commission of Inquiry into the sale of the Grand Regency Hotel makes damning findings regarding the conduct of high ranking public officers including the former Minister of Finance and the current Governor of the Central Bank of Kenya.  The Cockar Report “finds the entire transaction tainted with misrepresentation and deception to such an extent as to warrant specialised investigation by the Attorney General and other relevant institutions into the bona fides of the purchaser and other aspects of the transaction.”  3 years have now passed since President Kibaki received this report and no action has been taken against the public officers, not least against the Governor of the Central Bank of Kenya whose contract was extended in March 2011.   Kenyans are unaware of any attempt by Kenya’s investigative bodies taken any action to ascertain the bona fides of the purchaser as recommended by the Commission of Inquiry.

Kenya’s Ministry of Finance did not give evidence before the Cockar Commission despite its subject matter being intrinsically linked to the Goldenberg scandal which emanated from within Treasury during the early 1990s.  One of the persons named in Gazette Notice No.6217, former Minister for Finance, Hon. Amos Kimunya, chose at the last moment not to appear before the Commission to give evidence. When the Commission was informed on 20th September, 2008, that he would not be appearing, it opted to summon the Permanent Secretary to the Treasury to give evidence on the Treasury’s role in the sale of the Grand Regency. Unfortunately the Commission was informed that the Permanent Secretary, who was a member of Board of Directors of the Central Bank of Kenya, Mr. Joseph Kinyua was at that time out of the country and was not expected to return before the 17th October, 2008, or thereabouts. Treasury therefore did not appear before the Commission. 102 exhibits were considered in compiling the final report.  The proceedings run over 9,000 pages.

The Governor of the Central Bank was indicted in the final report of the Commission of Inquiry.  The Cockar report states that –

“Prof Njuguna Ndungu was not truthful to other public institutions, namely the Kenya Anti-Corruption Commission, the Commissioner for Lands, the Public Procurement Oversight Authority and the Prime Minister about the sale of the Hotel. Even the valuers who were instructed to value the hotel were not told the purpose for which the valuation was being undertaken. At CBK Prof Njuguna Ndungu and Mr. Abuga were solely responsible for the disposal of the Hotel. Prof Njuguna Ndungu’s conduct was contrary to S 18 of the Public Officer Ethics Act which provides “A public officer shall not knowingly give false or misleading information to members of the public or to any other pubic officer”. Prof Njuguna Ndungu, must take responsibility for the disposal of the Grand Regency hotel in a secretive and questionable manner.”

It goes further to report that Prof. Ndungu compelled a subordinate to also violate the law –

Mr. Kennedy Kaunda Abuga acted in concert with the Governor Prof.  Njuguna Ndungu to rush the sale of the Hotel while at the same time keeping it a close secret. Kennedy Abuga was only too willing to carry out all the wishes of the Governor Prof Njuguna Ndungu relating to the disposal of the Hotel without offering independent professional opinion. Kennedy Abuga’s conduct was also contrary to S 18 of the Public Officer Ethics Act.”

Why is Prof. Ndungu still in office?  What confidence can he really inspire?

You can download the Cockar Commission Report here

U.s. Senator Russell D. Feingold: Statement for the Record of Congress on Kenya March 18, 2009

Mr. President, two human rights defenders, Oscar Kamau Kingara and John Paul Oulu, were murdered in the streets of Nairobi, Kenya two weeks ago. I was deeply saddened to learn of these murders and join the call of U.S. Ambassador Ranneberger for an immediate, comprehensive and transparent investigation of this crime. At the same time, we cannot view these murders simply in isolation; these murders are part of a continuing pattern of extrajudicial killings with impunity in Kenya. The slain activists were outspoken on the participation of Kenya’s police in such killings and the continuing problem of corruption throughout Kenya’s security sector. If these and other underlying rule of law problems are not addressed, there is a very real potential for political instability and armed conflict to return to Kenya.

In December 2007, Kenya made international news headlines as violence erupted after its general elections. Over 1,000 people were killed, and the international community, under the leadership of Kofi Annan, rallied to broker a power-sharing agreement and stabilize the government. In the immediate term, this initiative stopped the violence from worsening and has since been hailed as an example of successful conflict resolution. But as too often happens, once the agreement was signed and the immediate threats receded, diplomatic engagement was scaled down. Now over a year later, while the power-sharing agreement remains intact, the fundamental problems that led to the violence in December 2007 remain unchanged. In some cases, they have even become worse.

Mr. President, last October, the independent Commission of Inquiry on Post-Election Violence, known as the Waki Commission, issued its final report. The Commission called for the Kenyan government to establish a Special Tribunal to seek accountability for persons bearing the greatest responsibility for the violence after the elections. It also recommended immediate and comprehensive reform of Kenya’s police service. Philip Alston, the UN Special Rapporteur on extrajudicial killings, echoed that recommendation in his report, which was released last month. Alston found the police had been widely involved in the post-election violence and continue to carry out carefully planned extrajudicial killings. The Special Rapporteur also identified systematic shortcomings and the need for reform in the judiciary and Office of the Attorney General.

Despite these official reports, there has been very little action toward implementing these recommendations. The Kenyan government has not taken steps to establish the Special Tribunal. The Police Commissioner and Attorney General, both heavily implicated in these problems, remain in their respective posts. Meanwhile, reported scandals involving maize and oil imports suggest that public corruption in Kenya remains pervasive and may be getting worse.

This is generating increased public resentment that can easily be exploited by armed militias and turn violent. I am especially worried about these heightened hostilities given the tensions expected to surround Kenya’s census, which is scheduled for later this year and the potential for them to flow over into next year’s constitutional referendum, and ultimately the 2012 general elections.

Mr. President, there is a lot of talk these days about conflict prevention. I see no greater opportunity for conflict prevention in Africa right now than in Kenya. The international community needs to coordinate its efforts to ensure the Kenyan government addresses these fundamental problems of governance and rule of law. The United States has a key role to play in this regard, especially given our longstanding and historic partnership with Kenya. To that end, I was pleased that FBI Director Robert Mueller visited Kenya two weeks ago and delivered a very clear message: “Public corruption should be a priority for all investigation and prosecution agencies in the country.” We need to consistently reiterate that message and we need to back it up with concrete actions that both support reform and sanction individuals found guilty of kleptocracy.

In the months ahead, Kenya must get more attention from our senior government officials. I hope the Obama administration’s nominee for Assistant Secretary of State for African Affairs will be ready to give it that attention and develop an effective strategy for preventing conflict there. Allowing the status quo to persist will be far more costly in the long run. Kenya is an extremely important country for the stability of the Horn of Africa and East Africa; it is a country of great talent and entrepreneurship, rich history and diversity. With all those strengths, a promising and peaceful future is possible for Kenya and we must help its people to attain it.

I yield the floor.