Cost of Kenya’s Somalia incursion hits Sh26 billion

Kenya’s incursion into neighbouring Somalia has consumed more than Sh25 billion whose reimbursement Nairobi is urgently seeking to ease its budgetary constraints.

Kenya is looking up to the United Nations to reimburse the money spent by its defence forces – now in Somalia as part of the African Union Mission (Amisom) in the coming months, having factored it in the Budget.

Amisom, comprising Burundi, Uganda, Djibouti, Sierra Leone and Kenyan forces, is backed by the UN but Kenya, which was the last to join the stabilisation force, has only received minimum external financial support for its contribution. 

The Treasury has included the Sh26.8 billion that the Kenyan Defence Forces have so far spent in the 2013 budget review and outlook paper, meaning it expects the reimbursement to be made in the coming months.

Nairobi made a similar provision for the payment of Sh18.9 billion in the last  financial year but was paid only Sh5.4 billion, leaving a Sh13.1 billion deficit.

Delay in reimbursement of the money has been linked to UN’s insistence on proper verification of Kenya’s claims that are yet to be done, culminating in budgetary pressures with the continued build-up of public expenditure obligations.

“Programme grants (Amisom reimbursements) amounted to Sh5.8 billion against a revised target of 18.9 billion, recording a shortfall of Sh13.1 billion,” the Treasury says in the report dated September 2013.

The Sh26.8 billion demand means Kenya has spent an additional Sh13 billion since it made the reimbursement demand last year.

READ: Budget factors in Sh23bn UN refund for Somalia war

The government expects its revenues, including the Amisom refund, to rise from this year’s Sh1.1 trillion to Sh1.268 trillion next year, representing an increase of 14.5 per cent.

Expenditure is also expected to grow from Sh1.28 trillion to Sh1.54 trillion next financial year, leaving a deficit of Sh278 billion. The country’s public debt is also set to continue rising in line with the Treasury’s borrowing plan.

The mismatch between revenue and expenditure has become the biggest obstacle to the planned execution of capital extensive projects such as the offer of free maternity care and provision of laptops to Class One pupils in line with President Kenyatta’s election promises.

Kenya launched an incursion into Somalia in response to incessant attacks and kidnappings by Al-Shabaab militants within its territory. Kenya formally sent 4,660 of its soldiers to Somalia in October 2011.

A year later, the UN Security Council, gave Kenya the green light to join Amisom, a decision that meant it would not bear the full costs of the incursion.

“We entered Somalia with the full cost to taxpayers but with Amisom, Kenyans will no longer be required to pay for our stay in Somalia,” the Chief of Kenya Defence Forces General Julius Karangi told a parliamentary committee last year.

Amisom is a seven-year- old, 17,000 member outfit that is made up of troops from Uganda, Burundi, Djibouti, Sierra Leone and Kenya.

Under the deal, Kenyan soldiers were to receive a monthly allowance of Sh88,408 ($1,028) besides their salaries as well as a comprehensive medical cover and access to advanced equipment.

Kenyan taxpayers were to bear the cost of naval hardware that was not covered by the UN resolution, but one that General Karangi said the country would later try to include in the deal.

Amisom was expected to refund Kenya all the monies spent from the date of the UN resolution until June 2012 when Amisom was to begin catering for the soldiers directly. The UN was also expected to reimburse Kenya the cost of fuel used to power her navy ships.

Kenya had also attempted to collect the money through its ambassador to the UN. Macharia Kamau, Kenya’s ambassador to the UN, told the Security Council that in January that failure to reimburse Kenya the money was not only “unacceptable”, but also “unsustainable.”

But 10 months down the line, nothing much seems to have changed and the government has only received part of the money it expected and had budgeted for.

“Troop-contributing countries spend significant amounts of money preparing troops, maintaining readiness and deploying expensive equipment to support given mandates and that burden weighs heavily on developing countries,” said Mr Kamau.

Efforts to get an explanation for the piecemeal payments to Kenya were not forthcoming from both the New York-headquartered UN Security Council and Treasury secretary Henry Rotich.

It is, however, understood that Amisom had early this year requested a forensic audit of Kenya’s claims, but it was not clear whether that demand has ever been met.

The Budget Review and Outlook 2013 shows that wage pressures and heavy financial obligations arising from the new Constitution are limiting the government’s ability to finance development.

The Treasury said local challenges coupled with weak growth in advanced economies could impact negatively on Kenya’s exports and tourism, posing serious challenges to budget execution. 

Ordinary revenue totalled Sh779.4 billion against a target of Sh823.7 billion, reflecting an underperformance of Sh44.2 billion.

The poor revenue performance was attributed to unfavourable macroeconomic conditions in the second half of 2012 combined with administrative challenges in VAT collections.