Busia County faces the risk of losing more than Sh50 million after an audit revealed that county staff disguised themselves as farmers to access unsecured agricultural loans.
The Auditor General’s report shows that the funds, meant to uplift small-scale farmers, were diverted, raising concerns about abuse of public resources.
The matter came to light when Governor Paul Otuoma appeared before the Senate County Public Investments and Special Funds Committee, where he was questioned over the Busia County Agricultural Development Fund.
The report indicates that between 2016 and 2024, at least Sh53.7 million was loaned out without collateral, putting the entire scheme in jeopardy.
Initially, 63 staff members admitted to receiving loans, but a deeper audit revealed that 128 employees of the county irregularly obtained Sh4.8 million from the kitty.
The report further notes that both the county executive and county assembly were involved in watering down the Busia County Agricultural Development Fund Act, 2014, to eliminate provisions on security and loan recovery.
Governor Otuoma admitted the loans were issued without safeguards, blaming what he called a “defective law” that he inherited. “The money was meant for small-scale farmers who could not get commercial loans. Initially, we thought only farmers benefited, but an audit revealed county staff were also involved,” he told the committee.
He said his administration had written to defaulters and drafted amendments to tighten the law.
However, senators accused him of moving too slowly. Machakos Senator Agnes Kavindu, nominated senators Raphael Chimera and Hamida Kibwana questioned why loan recovery only began in March 2024, almost two years after Otuoma took office.
“It seems Busia is giving free money, and no one is serious about recovery,” said Chimera.
Busia Senator Okiya Omtatah pressed the governor to punish officials who approved the unsecured loans, reminding him that Article 226(5) of the Constitution holds officers personally accountable for the loss of public funds. “Crack the whip. Pursue both the officials and the beneficiaries,” Omtatah said.
Committee chairperson Godfrey Osotsi urged the county to recover the loans directly from employees’ salaries, adding, “Sh53.7 million is not pocket change.”
The committee also flagged irregularities in the Busia Cooperatives Enterprise Development Fund, where 92 cooperatives received Sh106 million between 2014 and 2019 without collateral.
By June 2023, only Sh39.4 million had been repaid, with Sh2.8 million recovered from defaulters.
Governor Otuoma said the county attorney had been instructed to initiate legal action to pursue recovery.
