Third witness testifies in Mphwiyo, 18 others case

The State yesterday paraded Ministry of Finance, Economic Planning and Development chief economist Daniel Jenya as its third witness in the K2.4 billion Cashgate case involving former budget director Paul Mphwiyo and 18 others.

Jenya, in his testimony that was filled with economic jargons, took the court through the background of what led officials suspect a leakage in the financial system that might have led to plunder of public resources in government ministries, departments and agencies (MDAs).

He said, among others, that it was in 2013 that the ministry started to notice bad trends in the accounting system.

Jenya said officials noticed that government was borrowing excessively, with domestic debt grossing K900 billion and foreign debt hovering around K1.6 trillion by mid-2013.

“And the cost on domestic debt was way higher than the foreign debt. This is not an ideal trend for domestic borrowing,” he said.

This prompted director of public prosecutions Mary Kachale to ask: “What’s the ideal trend for domestic borrowing?”

Jenya said the most ideal trend for domestic borrowing is “borrowing as low as possible or not borrowing at all”.

However, Jenya emphasised that he did not meet/engage former budget director Paul Mphwiyo.

He stated that as they progressed with the implementation of the budget, it had become clear that reversing the trends was impossible.

Jenya said it was at this point that they decided to engage Budget Division in the ministry because “we believed that somebody should know that they are spending resources”.

Jenya will continue giving his testimony today.