Counties Turn Into Cash Cows: Senators Uncover Sh100 Million Loan Scam by Former Governors

A shocking Senate investigation has exposed a deep-rooted loan scam involving former governors, deputies, and senior county officials who took hefty car and mortgage loans and disappeared without repaying a cent.

The Senate County Public Investments and Special Funds Committee, chaired by Vihiga Senator Godfrey Osotsi, revealed that counties across Kenya have been recklessly dishing out multimillion-shilling loans to officials, often without any security, insurance, or repayment guarantees. Once out of office, the borrowers simply walked away, leaving taxpayers to foot the bill.

“County governments are issuing loans without proper securities or consideration for tenure,” Osotsi said during the explosive hearing.

“We even have cases where a governor borrowed Sh50 million. How can one possibly repay that in five years?”

Governors earn about Sh957,000 a month, yet Senate records show that some structured repayment plans spanning up to 20 years, well beyond their five-year terms. Senators said this was a clear abuse of office.

In Meru County alone, all three former governors, Peter Munya, Kiraitu Murungi, and Kawira Mwangaza, owe a staggering Sh58.04 million to the Executive Staff Housing Fund. Governor Mutuma Mutuma told the committee that Kiraitu borrowed Sh40 million in December 2022 with a 20-year repayment plan. Munya and Mwangaza took Sh25 million and Sh13 million respectively, all under similarly questionable terms.

“The problem began during Peter Munya’s tenure. Some have defaulted, others are still struggling to pay,” Mutuma admitted, defending the loans as being issued under outdated Salaries and Remuneration Commission guidelines.

In West Pokot County, the scandal is equally alarming. Former Governor John Lonyangapuo and his deputy Nicholas Atudonyang owe more than Sh45 million, with Atudonyang alone defaulting on Sh23.52 million. Shockingly, he spent most of his term abroad but still enjoyed full access to county loans.

“This is to notify you that you have defaulted in servicing your car loan and mortgage,” a county notice dated May 15, 2024, warned Atudonyang. “You have 30 days to pay or face legal action.”

Yet to date, no repayment has been made.

Current Governor Simon Kachapin confirmed the county’s futile attempts to recover the funds. “We’ve tried everything, even legal threats, but the former governor and his deputy remain untouchable,” he said.

Senators were furious, describing the revelations as a blatant culture of impunity that has turned counties into personal cash cows. Migori Senator Eddy Oketch demanded that the Ethics and Anti-Corruption Commission immediately step in.

“Taking a loan and refusing to repay is outright theft,” said nominated Senator Hamida Kibwana. “This is abuse of office, and these individuals must be held personally accountable.”

The committee resolved to summon all implicated officials under Article 125 of the Constitution, warning that unsecured loans will make recovery nearly impossible.

The Auditor-General’s 2024 report paints an even grimmer picture. Kirinyaga County still has Sh2.69 million in unpaid loans dating back to 2017, while Kericho County struggles to recover Sh61.95 million owed by 12 executive staff, including one deceased officer.

The Senate committee vowed to recommend sweeping reforms, tighter financial oversight, and legal action to ensure no county boss ever turns public funds into a personal payday again.

“Counties are not banks,” Osotsi declared. “We must stop this madness before it bankrupts devolution.”