NAIROBI, Kenya, May 8 – The National Treasury has defended its decision to suspend transfers to the County Government of Meru over a growing compensation dispute involving a French investor.
Treasury Cabinet Secretary John Mbadi told the Senate Finance and Budget Committee that the move was necessary to stop further losses from interest accumulating on the award.
The dispute involves French investor Michel Dechauffour, who was evicted in 2018 from a tourism facility in Meru National Park operated through Leopard Rock Mico Limited.
In 2019, the High Court in Meru awarded the investor Sh339 million in compensation after arbitration proceedings. Interest on the amount has been accumulating at 14 percent annually since March 2019.
According to Treasury documents, the debt has nearly doubled due to accrued interest, with the county admitting the amount had reached about Sh600 million by February 2024.
Mbadi warned that continued delays in settling the award could affect Kenya’s foreign relations with France and place further pressure on public finances.
Treasury said the matter also became a diplomatic concern after French President Emmanuel Macron reportedly raised it during talks with President William Ruto in Berlin.
The Treasury revealed that Meru County has so far paid Sh200 million through the investor’s lawyers, leaving an outstanding balance of about Sh442.9 million as of August 2025.
The county has indicated it cannot settle the balance without support from the national government.
Mbadi told senators that the national government plans to settle the debt first before recovering the funds from the county through a repayment arrangement that would not disrupt service delivery.
