An analysis
Kenya’s government has had a complicated history with its contractors, both local and international. The country’s tendering process is no stranger to corruption.
By greasing the right palms, contractors can secure a tender to build roads or other structures worth billions. And by failing to grease the right palms, other contractors can do a spectacular job and fail to get the dues they deserve.
Corruption is hampering the country’s economic development at a time when Kenya’s economy is otherwise expected to maintain its growth momentum. Kenya is East Africa’s largest economy and boasts a gross domestic product (GDP) of $ 74.94 billion.
GDP is the total value of everything produced in the country, otherwise known as the broadest quantitative measure of a nation’s total economic activity.
According to the Kenya Investment Authority – a statutory body responsible for facilitating the implementation of new investment projects – Kenya is also the most advanced economy in East and Central Africa due in part to its strong growth prospects supported by an emerging, urban middle class and an increasing appetite for high-value goods and services.
The East African nation’s economy grew by nearly 6% in 2018. According to a United Nations report, it will sustain that level in 2019 and 2020.
However, some economists argue that this growth would be in the double digits were it not for corruption. Researchers from the World Economic Forum (WEF) – an international institution for public-private cooperation – for instance, imply in one of their Global Competitiveness Reports that Kenya’s economic growth potential has been hampered by rampant corruption.
While many countries are indeed rife with corruption, there are some sub-sectors in Kenya that have made the trend seem like a professional sport.
Recently, It emerged that two of the country’s principal secretaries (PSs) are under investigation over the award of Ksh4.8 billion (about $47.6 million) classified tenders for the supply of sophisticated weapons to the Kenya Prisons.
The Ethics and Anti-Corruption Commission (EACC), Kenya’s anti-graft body, managed to thwart the payment of Ksh3.6 billion from the cash, which was to be paid before the delivery of the security items yet there was no tender performance security or bank guarantee, exposing the government to high risk loss.
And previous reports show that Kenya’s government is failing to pay many of its contractors on time, as corruption drains funds for legitimate projects from state coffers, suppliers and officials say.
Economists say the delayed payments are detrimental to the country’s financial sector, where non-performing loans jumped in 2018 to their highest level in more than a decade.
Mid-last year, several officials and business people were charged with involvement in the theft of nearly $100 million of public funds.
Kenya’s President Uhuru Kenyatta promised to fight corruption when he was first elected in 2013. The Head of State has made renewed affirmations to keep his promise. However, some of his critics say he has been slow to pursue top officials and ministers.
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