Mbadi agrees to lift Meru funds stoppage, pay French investor Sh139m

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The National Treasury Cabinet Secretary John Mbadi has agreed to withdraw the stoppage of Meru County Government funds and pay Sh139million to a French investor who is demanding Sh 64 million from the county administration.

This is after an alleged informal declaration by President William Ruto that his administration would clear a Sh640 million debt owed to a French investor by Meru County Government came to haunt the devolved unit over the takeover of Leopard Rock Hotel Limited.

Mbadi, while empathizing with Meru Governor Isaac Mutuma over the debt, said that in the event that there is going to be any liability beyond the Sh139 million, the national government will still intervene in that respect.

Appearing before the Senate Finance and Budget Committee, Mbadi was categorical that his Ministry will communicate to the Controller of Budget Margaret Nyakang’o on the lifting of stoppage of funds to Meru County Government.

“The move to stop the Controller of Budget from approving withdrawal of funds for Meru County had already been subjected to the provisions of Article 225 of the Constitution. The best we could do was to give the new development in writing,” he said.

The CS told the committee chaired by Vice Chairperson Senator Tabitha Mutinda that they would be communicating it formally to Dr Nyakang’o so that when she is doing the report to the Senate that is captured and then the matter is dispensed with.

Mbadi said that according to the way the law is crafted, once he invokes Article 225 and write for the stoppage to the Controller of Budget, the law kicks in with the COB having to respond and that is why they are going to first track the process.

“The National Treasury will communicate to the controller budget so that she can conclude the constitutional mandate that she has, and then we go back to normalcy in terms of funding the Meru County funding,” he said.

The CS disclosed that his Ministry has initiated the process by asking the Finance Principal Secretary, through the Principal Secretary Foreign Affairs to negotiate the issue of interest.

Mbadi told the committee that there are letters that the Meru county government did not respond to including the ones for January this year and only came forward when the National Treasury stopped the transfer of funds.

He further explained that the debt was likely to interfere with diplomatic relations with the French government, since the President of France had raised the matter with President William Ruto.

“Our bilateral relationship with France, including some of their funded projects, were at risk, In fact, they had indicated that if we are not going to resolve this matter, they were going to review any other future funding, and we have so many projects that are being funded by French government, and we felt that it was not right for mismanagement of a county to jeopardize relationship between two countries,” said Mbadi.

In May 2025, during an event at Meru National Park, President Ruto declared that the national government would settle a Sh640 million debt despite the presidential directive, the National Treasury has not settled the amount.

Mbadi said that had it been communicated to him formally, he would probably have not taken the steps that he took stating that the National Treasury does not always refer to the President but decisions are based on what is within the law, the Constitution and the PFM Act.

 “I have communicated to the Head of Public Service, who is working on behalf of the Head of State to communicate officially that decision, because up to now, there is no official communication to that effect, so that I can act, because it must be in writing,” said Mbadi.

The origin of the matter trace to a series of lease agreements entered between Leopard Rock Mico Limited and the Nyambene County Council, the predecessor in the title to the County Government of Meru in 1997.

The lease was subsequently superseded by a fresh Lease Agreement dated October 30, 2008 which revised the monthly rent to Sh60,000 subject to a 10 per cent increament every two years and increased the daily bed occupancy contribution to 10 per cent of total collections, payable monthly in arrears.

However, in July 2018, the County Government of Meru purported to terminated the lease on the grounds that certain building plans had not received the requisite approvals.