Kenya’s Odinga says has evidence Eurobond funds went missing

Kenya’s main opposition party says it will produce evidence in coming weeks to support allegations that almost a third of the $2.82 billion the nation raised in its debut Eurobond sale two years ago has been misappropriated.

Raila Odinga, the leader of the Coalition for Reforms and Democracy, said the East African nation’s Auditor-General doesn’t have a paper trail to account for the transfer of the funds into the country.

“In a few weeks, we will show that money did not come,” Odinga said in an interview at his offices in the capital, Nairobi, on Tuesday. “The Auditor-General has not been able to find evidence that it came. And even if it came, how was it spent. They are not able, up to now, to show which projects they financed.”

Kenya’s director of public prosecutions last month declined to investigate allegations that a portion of the funds were misappropriated, citing a lack of evidence. Odinga alleged in January that the Treasury can’t account for $999 million of the amount raised and called for a forensic investigation. The government is planning a second Eurobond sale in the fiscal year that begins on July 1.

President Uhuru Kenyatta’s government has repeatedly denied any wrongdoing and said the money was used to pay off a $600-million syndicated loan, build roads, rail, ports and expand electricity generation capacity.

Futile Exercise

Kenyatta’s government has increased borrowing as it rolls out infrastructure projects including a $3.2 billion railway that’s the biggest investment in the economy since independence more than half a century ago. The nation’s financing gap is projected to widen to 9.3 percent of gross domestic product in the next fiscal period from 8.7 percent this year.

“If he has evidence, let him proceed to those institutions charged with investigating criminal activities to do investigations,” the government’s spokesman, Eric Kiraithe, said by phone from Nairobi. “His claims injure the country’s image and serve no purpose at all.”

Yields on the notes due 2024 fell 13 basis points to 8.12 percent by 2:59 p.m. in Nairobi.

Odinga, a former prime minister and three-time presidential candidate, scoffed at what he said are government claims that “the money was lumped together with the other money from the exchequer and they were not able to tell the difference.”

Attempts to identify projects funded by proceeds from the Eurobond sales have been an “exercise in futility,” Odinga said, adding that the Treasury had “originated fake documents, which do not tally, which do not correspond.”