The real Eurobond story, according to PS Thugge

January 21, 2016
Thugge is therefore hurt by the turn of events that have taken centre stage these past few months, because they have hurt his career and hurt him at a personal level/FILE
Thugge considers the turn of events unfortunate especially because the facts have been swept aside, putting his career and reputation at risk. /FILE

, NAIROBI, Kenya, Jan 21 – Dr Kamau Thugge’s career didn’t peak at the Treasury. In fact, he has had a long spanning career in finance, having worked at reputable organisations such as the International Monetary Fund.

The Principal Secretary’s position at Treasury was therefore not his first position dealing with ‘big money’.

Thugge considers the turn of events unfortunate since the facts have been swept aside, putting his career and reputation at risk.

“When I go out in public and meet people, sometimes I ask myself… ‘does this person believe the Eurobond lies?’ Does he think I’m capable of such malice?’ It also makes me wonder about the thoughts of my children and wife,” Thugge says in an interview with Capital FM Business.

The tall, middle built man has grey hair – to probably show his experience in the world of finance. He also has a huge office to show for it; it is meticulously arranged with tonnes of folders, books and files depicting how well versed he is with his work.

Thugge has been relatively media-shy since he took office, but since his name came up in opposition leader Raila Odinga’s list as ‘a person of interest’ in the alleged Eurobond theft, the PS has tried to put his best foot forward and explain what happened.

“Will you consider suing Mister Odinga?” I ask him to break the ice.

“That is too much work and I do not intend to politicise it, but I am looking into it, so I cannot say whether I will or I won’t with certainty,” he says.

He settles comfortably into one of the visitors’ seats beside me, ready to explain the tale of Eurobond as below:

The Eurobond was floated with the grand intention of supporting government projects especially those in infrastructure. According to Thugge, the bond was intended to achieve macro-economic stability and to also diversify sources for funding government projects.

Upon agreement with Parliament, the government managed to float the bond which was in turn oversubscribed.

“We managed to raise US$2 billion, which was equivalent to Sh174 billion as the shilling was then trading at Sh87 against the US dollar. However, there were commissions and legal fees to pay, so the amount was deducted and we arrived to US$1.999 billion,” Thugge explained.

The first issue of contention, however, rose over questions on why the government banked the money abroad in commercial banks instead of keeping it at the Central Bank of Kenya.

“Central Bank could not have banked the Eurobond money because according to international law, when a bond is issued in the international market, Central Bank is required to open a foreign designated currency bank account to facilitate receipt of proceeds of the sovereign bond.”

Part 1 | Part 2 | Part 3

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