By Hope Barbara
Homa Bay County Government and the Department of Finance have been placed on the spot over the violation of the Constitution in securing a Sh 820 million mortgage loan for the construction of the county headquarters.
Similarly, concerns have been raised over the cost of constructing the headquarters after it emerged that the Bill of Quantities (BQ) presented to the cabinet for discussion and approval amounted to Sh 520 million — and how an additional Sh 300 million was added to the original BQ is raising eyebrows.
It is official that the County Government of Homa Bay contravened the law in securing a loan of Sh 820 million for the construction of the county headquarters from the County Pension Fund (CPF).
Principal Secretary for the National Treasury, Dr Chris K. Kiptoo, said the national government did not issue a guarantee for the Sh 820 million mortgage loan to Homa Bay County Government, in line with the provisions of Article 212(a) and 213 of the Constitution of Kenya.
In response to a community-based organisation, Interface Community Help Desk, which had sought information on compliance with Article 212 of the Constitution in relation to the Sh 820 million mortgage loan to Homa Bay County Government, he wrote:
“We acknowledge receipt of your letter Ref UCHD/S/VOL.4/2025 dated 3rd June 2025 of the above subject matter.
In your letter, you have indicated that Homa Bay County Government secured a loan amounting to Sh 820 million from the County Pension Fund for the construction of the Homa Bay County Headquarters, with the project having commenced in the FY 2023/2024.
Furthermore, you have requested the National Treasury to provide clarification and access to the following information:
- Whether the national government provided a guarantee for the Sh 820 million loan to the Homa Bay County Government in accordance with Article 212(a) of the Constitution of Kenya;
- Whether the National Treasury approved the said borrowing as required under the Public Finance Management Act and related regulations;
- Whether the Homa Bay County Assembly formally approved the borrowing and mortgaged loan agreement with County Pension Fund;
- Any publicly available impact assessments, feasibility studies, or risk analysis conducted prior to securing the loan.
The National Treasury has reviewed your request and wishes to inform you that the national government has not issued a guarantee for the Sh 820 million mortgage loan to Homa Bay County Government, in line with the provisions of Article 212(a) and 213 of the Constitution of Kenya.
For clarification and access to information on the other issues you have raised in your letter, the National Treasury requests you to kindly seek clarification from Homa Bay County Government.
The purpose of this letter, therefore, is to provide clarification on the issue of guarantee of the loan, which is the only issue which concerns the National Treasury.”
Article 212 of the Constitution of Kenya pertains to borrowing by county governments. It stipulates that a county government may borrow money only if the national government guarantees the loan and if the county government’s assembly approves it.
County governments cannot independently secure loans. The national government must first guarantee the loan, indicating a level of financial oversight and responsibility placed on the national level.
Even with a national government guarantee, the county government’s assembly (the legislative body of the county) must also approve the borrowing. This ensures that the county government’s elected representatives are involved in the decision-making process regarding borrowing.
Sources at the county and at the assembly told the writer that the project was discussed in the cabinet and the Bill of Quantities was amounting to Sh 520 million, and they do not understand how an additional Sh 300 million was arrived at.
The sources at the assembly also claimed that the initial approval was at Sh 280 million and no variation had been done for additional approval.
“The variation is above 25 percent according to procurement regulation, and the Finance Department should have come back to the assembly to seek additional approval — and this was never done. It is time the Ethics and Anti-Corruption Commission (EACC) raided the county and the assembly,” they said.
CEC Finance Mr Solomon Obiero did not respond to our WhatsApp text on the above allegations.
