- Githunguri MP recently claimed that someone wrote and had billions of shillings which had been allocated to the Coffee Cherry Fund diverted elsewhere.
- But PS Kiptoo said the National Treasury upholds its commitment to transparency and accountability in managing public finances.
Image: FILE
The government has refuted claims by Githunguri MP Gathoni Wamuchomba that Sh1.5 billion from the Coffee Cherry Advance Revolving Fund had been diverted and misused.
National Treasury Principal Secretary Chris Kiptoo said the allegations are misleading as no funds have been reallocated, diverted or misused in any way.
“We would like to reassure the public and all stakeholders that the Sh5 billion allocated for the Coffee Cherry Advance Revolving Fund (Sh3 billion) and Payment of Coffee Debts (Sh2 billion), as part of the Approved Budget for 2024-25 financial year, remains fully intact,” the PS said.
While appearing on a local radio station on Friday, Wamuchomba claimed that someone influential wrote and had billions of shillings which had been allocated to the Coffee Cherry Fund diverted elsewhere.
She claimed a sum of about Sh6.75 billion was allocated to the fund in the previous and current financial years but only Sh750 million has thus far been disbursed to farmers.
“The President promised that this year, it was not going to be Sh4 billion it was going to be Sh6 billion for 2024-25 financial year and a Cabinet memo was done. It was Sh2.75 billion plus Sh2 billion that was allocated last financial year plus another Sh2 billion this year,” she said.
“When we decided that Finance Bill has been withdrawn, we lost that Sh2 billion (for this financial year) so we went back to last year’s allocation and out of last year’s allocaton, only Sh750 million was put instead of Sh2 billion” she added.
But PS Kiptoo said the National Treasury upholds its commitment to transparency and accountability in managing public finances, and reiterated that no funds meant for coffee farmers has been lost.
He said the ministry is available to clarify any questions or provide further details to ensure that the public is well-informed with factual information.
“To clarify, no funds have been diverted or misused from the Coffee Cherry Advance Revolving Fund. The National Treasury has strictly adhered to the Public Finance Management Act (PFM), CAP 412A, as well as all other applicable legal and regulatory guidelines,” he said.
The PS said that in accordance with Section 43 of the PFM Act, accounting officers may request reallocations of funds through formal submissions to the National Treasury.
He acknowledged that the National Treasury received such a request from the State Department for Cooperatives, via a letter dated August 22, 2024.
“The request proposed reallocating Sh1.5 billion from the Coffee Cherry Advance Revolving Fund to support a number of development projects in the sub-sector. Upon careful review of the request, and in strict adherence to the PFM Act, the National Treasury declined the proposed reallocation,” PS Kiptoo said.
The PS explained that Section 43(1)(a) of the PFM Act prohibits the reallocation of funds that are earmarked for transfer to another government entity or person.
The piece of legislation, he emphasised, applies to the Coffee Cherry Advance Revolving Fund.
“On September 2, 2024, we formally communicated our decision to the State Department for Cooperatives advising them that the Sh1.5 billion should remain dedicated to the Coffee Cherry Advance Revolving Fund's original purpose, which is to support coffee farmers through targeted interventions,” PS Kiptoo said.
The Coffee Cherry Advance Revolving Fund (CCARF) was established to provide affordable, sustainable and accessible cherry advance to smallholder coffee farmers.
The fund covers coffee farmers with land not exceeding 20 acres.
They are given cash from the fund in advance to cultivate coffee and pay back at the point of sale once the harvest their crop.
New KPCU was given the mandate to manage and administer the fund to coffee farmers as per the Public Finance Management Act (Coffee Cherry Advance Revolving Fund) Regulations 2020.