NAIROBI, Kenya – Busia County risks losing more than Sh50 million after an audit revealed that county employees posed as farmers to obtain unsecured loans from a fund meant to support small-scale agriculture.
The Senate County Public Accounts Committee heard that the irregularities stemmed from loopholes in the Busia County Agricultural Development Fund, which disbursed at least Sh53.7 million between 2016 and 2024 without collateral.
According to Auditor-General Nancy Gathungu’s report for the year ending June 30, 2024, 128 employees benefitted improperly from the fund, pocketing Sh4.8 million.
The report also pointed to collusion between the county executive and assembly in weakening the 2014 law governing the fund, stripping away key safeguards on security and recovery of loans.
Governor Paul Otuoma, who took office in 2022, admitted the loans were issued without proper checks, blaming what he called a “defective law” inherited from previous administrations.
“The money was meant for small-scale farmers who could not get commercial loans. Initially, we thought only farmers benefited, but an audit revealed county staff were also involved,” Otuoma told senators.
He said defaulters had been contacted and his administration had proposed amendments to tighten the law.
But senators questioned the governor’s commitment to recovery. Machakos Senator Agnes Kavindu and her colleagues Raphael Chimera (nominated) and Hamida Kibwana criticised the delayed enforcement, noting efforts only began in March 2024.
“It seems Busia is giving free money, and no one is serious about recovery,” Chimera said.
Busia Senator Okiya Omtatah urged accountability, citing Article 226(5) of the Constitution, which holds public officers personally liable for financial losses.
“Crack the whip. Pursue both the officials and the beneficiaries,” he told the committee.
Committee chairperson Godfrey Osotsi proposed salary deductions for defaulting staff. “Sh53.7 million is not pocket change,” he said.
The senators also flagged similar lapses in the Busia Cooperatives Enterprise Development Fund, which disbursed Sh106 million to 92 cooperatives between 2014 and 2019 without collateral.
By June 2023, only Sh39.4 million had been repaid, with just Sh2.8 million recovered from defaulters.
Governor Otuoma said the county attorney had been directed to initiate legal proceedings to recover the outstanding balances.
