Iringo, who currently chairs the NCPB board of directors, said agency’s assets may also be auctioned over a Ksh7.3 billion debt accrued from a defaulted bank loan taken using its assets as security.
In addition, the board has Ksh4.1 billion maize subsidy debt and owes ksh1.11 billion to the Department of Devolution, Agriculture development corporation, Agriculture Food Authority, and the county government of Murang’a.
According to Iringo, the board has had an unserviced bank loan of Ksh6.38 billion. The interest and penalties accumulated monthly are Ksh110 million at a 22.5 percent rate.
“It was worth noting that the total exposure is Ksh7.3 billion that’s is Ksh6.38 billion loans and Ksh1 billion interest charges paid from NCPB resources which are reimbursable,” added Iringo.
In March 2020, the bank overdrew the board’s operating accounts over failure to pay. They were thus unable to access services from the bank which is their main banker. The board’s credit rating was also shared with other banks, affecting its ability to get alternative financing.
“In the event of this position not being regularised soon, the bank will exercise the right to liquidate the NCPB properties which are held as collateral for the loan as per the facility financing covenants,†he noted.
Speaking before the National Assembly Agriculture committee, the former PS told MPs that the bank seeks to list the board directors in the CRB which will scar their creditworthiness.
NCPB associated its inability to take part in the Big Four Agenda under the warehousing receipt system project to the broken-down stores. They had asked the government to approve their request to discard five non-core assets in order for them to get funds.
“The implementation of the 2020/2023 strategic plan will require funding to the tune of Ksh24.3 billion which will be sourced largely from the liquidation of the government debts, borrowings, and disposal of non-core assets.”
“Currently NCPB is owed Ksh16.22 billion by various government ministries and agencies for services rendered and fertilizer supplied,†revealed Iringo.
Source: KENYAGIST.COM
