The Meru County Government is pinning its hopes on the Senate Finance and Budget Committee to resolve a financial crisis resulting from Sh642 million owed to a French national.
Last month, the Controller of Budget ordered the freezing of 50 percent of Meru County’s monthly disbursement for failure to settle the pending bill dating back to 2020.
Meru receives about Sh800 million from the exchequer every month.
According to the Controller of Budget, Meru’s “failure to settle the debt over a six-year period constitutes a breach of the Public Finance Management (PFM) Act, exposing Kenya to international diplomatic risk.”
In January 2021, the High Court upheld a 2020 arbitral award of Sh337 million to Leopard Rock Mico Limited, the proprietor of Leopard Rock Lodge located in Meru National Park, for wrongful eviction by the Meru County Government.
Leopard Rock Mico was owned by French investor Michel Dechauffour.
The arbitral award has been accruing interest at 14 percent per annum, rising to Sh642.9 million as of July 2025. An attempt by the Meru County Government to appeal the High Court decision failed.
So far, the county has paid Sh200 million to the hotelier.
However, overwhelmed by the huge debt and frequent arrest of the finance executive for contempt of court, Meru Governor Isaac Mutuma last year appealed to President William Ruto to bail out the county government.
Speaking in Meru County during the launch of the Human-Wildlife Conflict Compensation Fund in May 2025, President Ruto said the national government would settle the debt to ease the county’s financial burden.
“Meru has had issues with an investor who operated Leopard Rock Hotel. We will negotiate with the investor on how to make the payment. My government will pay the money on behalf of Meru,” President Ruto said.
According to the Meru Medium Term Debt Management Strategy Paper 2026, the county anticipates an allocation of Sh384 million from the National government to settle the debt.
Following the assurance that the debt would be settled, the county treasury removed the liability from its books, prompting the Controller of Budget’s recent action.
However, the decision to freeze part of the county’s revenue must be approved by the Senate Finance and Budget Committee.
Last week, Governor Mutuma and Senator Kathuri Murungi appeared before the committee seeking reprieve.
Governor Mutuma urged senators to reject the National Treasury’s decision, arguing that the county had made efforts to pay, including the Sh200 million already settled.
“After the President assured us that the national government would pay, there was no need for the county government to budget for this liability,” Governor Mutuma told the committee.
Earlier, the governor said the county was financially constrained, with only Sh1.5 billion available for development every year.
“Most of the money goes to operations and remuneration. If we pay more than Sh600 million, we will ground the Meru County Government. This is why we sought the intervention of the President, and he committed to take it up. Why can’t the National Treasury honour the President’s word?” he said.
While senators accused the National Treasury of heavy-handed administrative action, the Meru governor struggled to provide evidence that President Ruto had formally committed to settling the debt.
Committee Chairperson Ali Roba directed the Ministry of Trade to produce formal records of the alleged presidential commitment to assume the liability.
Senators also accused the Controller of Budget of selective enforcement against government entities with pending bills.
“We have 47 counties in this country. Are you telling us it is only Meru County with pending bills? Is it because this debt is owed to a foreigner that you have decided to stop funds to Meru? What about the innocent Kenyan suppliers who have taken loans, lost property, and have not been paid?” Senator Tabitha Mutinda posed.
Kakamega Senator Boni Khalwale termed the National Treasury’s action unfair.
“It would be wrong for the Senate to punish the people of Meru by denying them funds. When the President promised to take up the debt, Meru County leaders had no reason to doubt him,” Khalwale said.
The Senate Finance and Budget Committee is expected to table a report that will determine whether Meru County will lose half of its monthly revenue, as recommended by the Controller of Budget.
The Meru County Government evicted the hotelier in 2018, arguing that Leopard Rock Lodge had deteriorated and generated minimal revenue.
This prompted the investor to seek compensation for breach of contract.
