Kibaki’s Economic and Anti-Corruption Policies have Failed Catastrophically in Kenya: Part 1

Kibaki's corruption has stagnated the country

Many Kenyans remain pessimistic about the economy in 2012. According to an end of the year poll by Ipsos-Synovate, whose results were released on December 30, 2011: “the poor economic conditions experienced in 2011, evidenced by soaring fuel prices and ever increasing prices of consumer commodities, have made Kenyans pessimistic about the economic prospects in 2012.” The high cost of living and rising  prices of basic consumer commodities are unbearable for the ordinary Mwananchi.

President Kibaki’s economic policies have sunk majority of Kenyans into deeper poverty, as they continue to bear the brunt of skyrocketing food and fuel prices. Although Finance minister Uhuru Kenyatta reduced excise duty on kerosene and diesel by 30 and 20 per cent (KSh2.16 and Ksh2.06) respectively in April 2011, petrol prices were increased by KSh9 and ranged from KSh111-113 per liter, countrywide. As usual, Kenyans ended up paying more for increased public transportation costs. In addition, government taxes on fuel ran between 45 and 55 per cent of pump prices, so the government reductions were meaningless. To make it worse, official corruption rocked the National Oil Corporation of Kenya (Nock), scandals which led to huge financial losses for the government, yet Energy minister Kiraitu Murungi failed to offer solutions. Eventually, it was the poor and helpless consumers who were highly taxed to compensate for the grand theft.

As an economist and the longest serving Member of Parliament, Kibaki knows virtually everything pertaining to the country’s economy, having served as the Permanent Secretary for the Treasury in 1963, then Assistant Minister for Finance and Chairman of the Economic Planning Commission the same year. Kibaki later served as Commerce and Industry Minister in 1966. From 1969 to 1982, he held the Finance and Economic Planning docket and in 2002, he was elected president on the platform of reforms to turn around the economy, which had been mismanaged by then-Dictator Daniel arap Moi, for 24 years.

Although Kibaki is lauded for the country’s improved economic growth, there is little to show by way of social capital among the majority of Kenyans. Revenue collection is at its best, yet most of the public institutions remain poorly managed and still offer low quality services. There is also a serious disconnect between the government’s investment priorities and that of the citizenry. For instance, the budget for expanding Thika Road is KSh27 billion and counting, yet many roads in other parts of the country are not being improved. Such a strategy adds up to the inequality of service delivery, since good roads are necessary for all Kenyans. Property developers are already attracted to Thika town because of the road infrastructure. In the long run, this will only amount to the cyclical one-sided economic prosperity within one region — a fact that has prevailed in Kenya’s history since Independence and which is fueled with tribalism and “it’s our turn to eat” politics.

Kibaki era billionaires
Lawyer Ahmednasir Abdullahi’s op-ed titled: “Voodoo economics and development corruption” (Saturday Nation, October 15, 2011), criticized Kibaki’s skewed infrastructural development that favors certain counties. He wrote: “For instance, the billions spent on the Nairobi-Thika super highway could have given us a dual carriageway from Mombasa to Nairobi or even beyond. Look at Nairobi itself. The northern parts of the city are undergoing massive infrastructure developments that open to central Kenya. The other parts are frozen in an underdevelopment capsule.”

His opinion on Kibaki’s economic policies was equally harsh. “With the shilling in a free fall, basic commodities out of reach for ordinary Kenyans, millions starving year after year, the poor getting poorer and the few privileged stealing more from the coffers of the State, Mr Kibaki’s disastrous economic policies will leave an indelible imprint on Kenya’s history far beyond his term.”

He also felt that, “the typical new billionaire is a man who was on financial death row in 2002. In 2003, he was appointed to head an important state organ. From 2003 to 2011, he has been benefiting through kickbacks in tenders and procurement.” In reality, there is nothing being done by President Kibaki to stop public funds from being siphoned into private hands, despite his repeated directives against corruption. It means that he has accepted and encouraged corrupt means of generating private wealth through State coffers. Ahmednasir fears that, “these billionaires, with their ill-gotten wealth, pose the greatest threat to stability in the next administration. They will probably try to destabilise it using their wealth.” Further, he asserted that by allowing wealth to be created illegally, Kibaki is deliberately promoting “communal empowerment” within a certain ethnic group.

Another piece published in the Nairobi Law Monthly titled: “Kibaki era billionaire flex their muscles” (May, 2011), suggested that Kibaki’s leadership has seen the emergence of more billionaires than the previous regimes. It also gave a historical perspective of how such billionaires “from one part of the country” were created. “The emergence of a new class of wealth owners is a tectonic shift never witnessed since the 1960s when then-Minister for Commerce, the late Dr Gikonyo Kiano, handed over enterprises owned mostly by Kenyan Asians to a select elite and motley Murang’a business operatives. Since then, the only changeover in business would involve unsophisticated speculative grabbing of property by Moi operatives and a group of newly rich Kenyans of Asian origin who took advantage of the arbitrage of Rift Valley power brokers.” Murang’a County in Central province has 12 billionaires who emerged during the era of President Kibaki.

Is Vision 2030 realistic?
On October 30th 2006, President Kibaki launched the process of Vision 2030, which is the blueprint for transforming Kenya into a middle-income economy, covering the period 2008-2030. If implemented successfully, all Kenyans will have a high quality of life by 2030. However, in a Wikileaks cable released in September 2011, the Vision was criticized for being just another of the many sugar-coated government dreams. Former American Ambassador to Kenya Michael Ranneberger, noted in 2007 that: “Vision 2030 often reads like a naive call for a perfect society, smacking a bit of old-fashioned socialist central planning.” The cable claimed that the Kenyan government is good at charting development plans but does not implement them. “But with the right leadership and a little bit of luck, Vision 2030, even if only partially successful, could help frame a reform agenda that puts Kenya on a higher growth path,” he wrote.

How does the Kenyan government expect to join the middle-income category if say, it cannot invest heavily in research and development? With grand cash theft in the free primary education (FPE) program, what kind of skills-base is it building among public school children? The 2011 results of the Kenya Certificate of Primary Education (KCPE) were an indictment of the poorly-run program, especially without adequate teachers to impart basic literacy skills.

Kibaki’s administration keeps shocking Kenyans. Last year, the Education Permanent Secretary Professor James ole Kiyiapi, said that trained teachers were allowed to seek employment outside the country, since they had no local opportunity on a permanent basis. It is ironic that the education system lacks teachers, yet those trained using taxpayers money are jobless. This is a typical sign that the whole system is in crisis.

What can the government learn from Cape Verde that became a middle-income country in 2007? Its country brief by the World Bank states: “In December 2007, Cape Verde achieved middle-income country status. Good governance, sound macroeconomic management, including strong fiscal discipline and credible monetary and exchange-rate policies, trade openness and increasing integration into the global economy, a responsible use of donor support, and the adoption of effective social development policies have produced impressive results throughout the Cape Verdean archipelago. Growth in real income per capita reached more than 5 percent during 2005-08, well above the average for Sub-Saharan Africa and for Small-Island States.”

Further, what can Kenya learn from the former Asian Tigers that invested heavily in higher education, research and technology, to leapfrog the Western models of economic development? Final part to be continued on Thursday this week.

Jared Odero

16 comments

  • Hassan Omar told the truth about Kibaki planting GEMA people in all top jobs:

    “You scar and bleed a nation when you willfully negate its sensitivities. To pass the microphone from one Njoroge to another, then to Nyoike and Murungi while addressing the soaring costs of energy. Or when Ndung’u passes the microphone to Kinyua then to Kenyatta to tell us why the shilling is losing ground. Or when the leadership of the country’s security apparatus is almost exclusively from Kibaki’s ethnic Kikuyu. You then wonder why there’s ethnicity in Kenya when the Government is working ‘tirelessly’ to patch your roads and build you new ones with flyovers. Kenyans are not idiots. We are a people endowed with sufficient talent, intellect and reason, alhamdulillah (Thank God)!”

  • Moi’s pay more than doubles
    By MUNA WAHOME

    Tuesday, June 14 2011

    The cost to the taxpayer of keeping retired president Daniel arap Moi in comfortable retirement more than doubled last year, putting him firmly among the best paid public servants in Kenya.

    Treasury documents show that Mr Moi, who has largely kept to non-official duties and political campaigns, pocketed Sh58.4 million in allowances, reflecting a major jump in the cost of his retirement package.

    Mr Moi had received an average of Sh12 million in personal allowances since 2006, before the sudden and unexplained rise in his retirement pay. The payment means Mr Moi has cost the taxpayer more than Sh100 million in allowances alone since 2006.
    In the fiscal year starting July, nevertheless, Mr Moi will have to live within the modest pay of Sh18 million in personal allowances.

    Treasury plans to keep the payout at that level in the next three years at the expiry of which he will be joined in retirement by President Mwai Kibaki as per the stipulations of the new Constitution. Treasury officials on Monday declined to comment on the sudden rise in the retired president’s take-home and Mr Moi’s personal secretary Lee Njiru referred our inquiries to the head of the civil service, Francis Muthaura.

    Mr Moi retired in 2002 after serving as Kenya’s President for 24 years, which has entitled him to regular payments, the first ever for a former head of State in Kenya. The first president, Mzee Jomo Kenyatta, died in office. The numbers published by Treasury indicate the State at the same time provided a reimbursable medical expenditure cover for inpatient services amounting to Sh8 million to Mr Moi.

    This figure, also set to remain constant, was first factored in the 2006/07 estimates. In terms of personal allowances, Mr Moi took home more money than President Kibaki who earns Sh16.1 million in personal allowances annually. The President was also paid Sh8.4 million in basic salary meaning he took home Sh24.5 million in the current year. President Kibaki constitutionally vacates office in 2012/13 and his successor will inherit the same payments, according to projections carried in the recurrent estimates.

    Details of Mr Moi and his successors’ pay are contained in the recurrent expenditure estimates under the Consolidated Funds Services. This is the account under which constitutional office holders and debt services are paid from. In terms of payment, the Teachers Service Commission, employer of all government teachers, takes most of the cake with the chairman, deputy and members allocated Sh200.9 million.

    It is equalled by the Salaries and Remuneration Commission, which is in the process of being set up. Like TSC, the Civil Service salary determiner will have its budget scaled up to Sh211.7 million by 2013/14. A number of constitutional commissions are winding up and will not cost the taxpayer any money in the coming financial year.
    They include the Interim independent Electoral Commission, the Committee of Experts on Constitutional Review and Interim Independent Constitution Dispute Resolution Commission.

    But the pay burden on taxpayers will not ease because the Constitution has created even more commissions and constitutional offices that are set to push up the salaries and allowances bill. Top in the list of new commissions is the National Land Commission, where office holders will take home a total of Sh125 million in the coming year.

    Parliamentary Service Commission members will take home a similar amount of money while the Controller of Budget office, where the aborted selection of Mr William Kirwa sparked controversy, has been allocated Sh11.5 million. National Police Service Commission gets Sh125.4 million while Independent Electoral and Boundaries Commission get Sh211 million.

  • Impunity reigns high in Kenya. Now Deputy Chief Justice who was an activist for many years and claimed to fight for the poor has joined the group of arrogant Kenyans. To threaten a security guard with a pistol shows how so much power has got into her head. Shame!

    DEPUTY CJ IN GUN DRAMA

    Wednesday, 04 January 2012 00:09 BY DOMINIC WABALA

    A security guard searching clients entering the Village Market shopping mall in Nairobi has lodged a complaint with police over the behaviour of the Deputy Chief Justice Nancy Baraza. Security guard Rebecca Kerubo Morara claims she was intimidated with a pistol by Baraza when she sought to frisk her on New Year’s Eve. Baraza accepts there was a dispute but denies threatening the guard with a gun. Morara recorded a statement at Gigiri Police Station in the Occurrence Book reference OB 14/1/1/2012.

    According to the report, Baraza drove into the shopping mall after 5pm and parked her car about 50 metres from the point where shoppers are frisked before entering the mall. She then walked past the desk clearly marked Security Check where other customers were queueing.

    The police are reviewing CCTV footage of the incident. On the footage a female guard follows Baraza into the mall and speaks to her before she enters a pharmacy about 30 metres from the entrance. Thirty minutes later Baraza reportedly walks back to the security desk where she pauses briefly before walking back to her car. She comes back holding “something” in her hand and is seen confronting the female guard who goes on her knees at around 6.18pm on the CCTV.

    Yesterday, Police Commissioner Mathew Iteere said he was aware of the incident and had instructed his officers to investigate. “I cannot give any more details as the officers are yet to brief me,” he said. Yesterday, the Deputy CJ denied drawing a gun but described the incident as “unfortunate”. “I walked into the chemist in a hurry and I did not realise that this lady was conducting security checks. But instead of talking to me with a little courtesy, she was shouting insults at me even as I tried to calm her down. I explained to her that I was a law-abiding citizen but with armed security detail. I said that if she continued to shout at me, my security detail would intervene and indeed my security intervened. My security had a gun and no one flashed or pointed a gun at her,” Baraza said.

    “This was a very unfortunate incident and maybe I should have just stuck to my usual security arrangements which demand that I never walk alone. But you know we are all human and sometimes you just want to be ordinary. I have shopped in that chemist for many years,” Baraza said. “I was not defying the security arrangements put in place at that place but the lady could not listen to me and was instead shouting and embarrassing me. The allegation that I pinched her nose is wrong. I only touched her face as she tried to grab me,” explained Baraza.

    Shopping malls and commercial buildings in Nairobi tightened up their security checks last year after al Shabaab threatened revenge attacks for the KDF incursion into southern Somalia. The initial report indicated that the female guard was manning the Village Market entrance with her male colleague when the Deputy CJ and her bodyguard drove in. The female guard was frisking customers when a woman walked quickly past the queue. The guard requested that the woman complies with the search and claimed that she did not recognise Baraza.

    According to Morara’s statement, the Deputy CJ pinched her nose and told her to “know people” before she walked past her to the pharmacy. On her way back, the Deputy CJ warned that she could order her bodyguard to shoot Morara. Morara claims that Baraza then went to her car and came back brandishing a pistol. She says that she (Morara) went on her knees pleading for her life.

    The shaken guard reported the incident to her supervisor after Baraza left. She then reported to Gigiri Police station and was summoned back on Monday afternoon. Gigiri OCS Hassan Bwego yesterday spent the day at Village Market with security officers watching the CCTV footage. He was joined in the afternoon by the OCPD Josek Nasio.

    Morara told the Star, “I was frisking customers who were queueing when I noticed a woman walk past without being searched. I followed her to request that she comply with the mandatory search. I did not recognise her and pleaded with her telling her it was mandatory that all clients are searched because of the security situation. She pinched my nose hard and told me to know people and then walked into the pharmacy.” Morara said the woman later informed her she was the Deputy Chief Justice.

    Morara added, “The lady walked to her car and came back brandishing a pistol threatening to kill me. I went on my knees and pleaded with her to spare my life. I was very scared because my father was shot dead in a similar situation. I don’t think I want to work as a guard after that experience”.

  • Kibaki Vodoo economy has benefited only his privilaged rich and wealth Kenyans /Asians /wasungus and some Arabs .The majority of Kenyan people are extremely wretched of the earth.Kibaki should be taken to court after his retirement.
    We should also blame the common wananchi who has not learned a lesson apart from murmuring ,gossiping and yapping.Something drastic should be put in place like forming vanguards who should be taking laws in their hands like punishing these class of rulers.

  • Dr Warthog Warthog

    Kenyan women were raped in turns by Mungiki thugs sponsored by none than Uhuru Muigai Kenyatta,. In places like Kisumu Luo men were masacred in thousands ,the mogue in Kisumu was overflowing with dead Luos young teens in their 2oth and above.Luo as a tribe has paid a lot of high price since Uhuru-days,. Jomo Kenyatta murdered many of Luo youth when he went to Kisumu to open a Russian Financed Hospital ,and when Kenyatta was shouted down and booed by Luo youth who started throwing stones ,the Jomo Kenyatta guards shot dead many luos and nothing happened .The government business went as usual hence the lives of these Luos was/is nothing .Kibaki hates luos with passion he is the worst tribalist kenya has ever had and he will be remembered as a ruler who invaded somali ,and a defender and protector od drug-warlords ,money-launderers, pyramid schemes, and human trafficking etc.

  • GUARD ASKED TO DROP GUN COMPLAINT .
    Thursday, 05 January 2012

    PRESSURE was yesterday being put on Village Market guard Rebecca Kerubo Morara to withdraw her complaint against Deputy Chief Justice Nancy Baraza. She had complained to the police that she had been threatened with a pistol by Baraza on New Year’s Eve.

    In a brief statement to media houses yesterday, Baraza described the incident at Village Market as “unfortunate” and said it would be prejudicial to comment further since the police were still investigating. Baraza did not deny that there had been an altercation but said her actions were provoked by “genuine security apprehension.” “In the last few months, a number of security incidents have occurred in and outside of my office. As such threats of violence have been directed at me, I have had to request increased security measures for my office as well as my own personal security,” the statement declared. “It is important the police are allowed to finish their investigations without any interference,” she said.

    Yesterday Morara claimed that she had been summoned by a senior police officer to Gigiri Police station and later visited by the same officer at Village Market to request her to withdraw the complaint. “I have been requested to withdraw the case by a police officer who came to see me. I did not go to Gigiri Police station when they summoned me because I and my witness with whom we were on duty recorded our statements there. However, my employer has told me that only I can make the decision to withdraw the complaint and nobody should compel me to do so,” said the mother of two children.

    Morara said the police officer called her to his office three times where she met a judicial officer who sought to cut a deal with her. Morara said that in the first meeting the judicial officer apologised on behalf of the judge but the subsequent meeting ended in disarray. The newly posted Officer Commanding Gigiri Police Division Patrick Mwakio was unavailable for comment yesterday. “They are still debating on what to do since they do not want to antagonise the judiciary by recalling her gun and asking her to record a statement,” stated a police source.

    Yesterday Nairobi police chief Antony Kibuchi said police have no mandate to ask Morara to withdraw her complaint. He added that Nairobi CID boss Peter Muinde has been directed to lead investigations into Morara’s claims that Baraza pointed a gun at her and pinched her nose. Muinde has been directed to obtain the CCTV footage from Village Market and to review the witness statements.

    Anthony Makhanu, who was on duty with Morara, said they did not recognise the Deputy Chief Justice when she walked past them. “The person involved walked past our desk and Rebecca followed her requesting to search her because she was supposed to frisk female clients while I was checking the men. She claimed that Rebecca had shouted at her yet she was a senior person in government. We only noticed later that she had a bodyguard who informed us that she was the Deputy Chief Justice. It was not malicious at all,” Makhanu said.

    For the third day in a row, senior police officers visited the Village Market security office to review the CCTV clips. Coincidentally Morara’s father Thadeus Bundi was a security guard who was murdered on duty in Karen in June 2000. No-one was ever arrested for his killing. “These stringent security measures apply to all persons visiting the Village Market without exception and they include the use of metal detectors and a search on all motor vehicles and persons entering the premises to ensure their safety. The management appreciates the fact the security measures in place are comfort to visitors who are being subjected to the search as it is for their own protection,” stated Village Market management yesterday.

    The Law Society of Kenya chairman Kenneth Akide yesterday defended the character of Baraza but called for thorough police investigations. “It very unlike Nancy Baraza. In fact, I don’t believe the story myself. She is a very calm and a very gracious lady,” said Akide in a telephone interview. Civilians who misbehave have had their guns recalled and been taken to court in the past.

    Recently PNU political activist Stanley Livondo who brandished a gun at a meeting at Nyayo Stadium in November was charged in a Kibera court and had his gun withdrawn. Prof Arthur Obel, who shot at a matatu driver in a road rage in 2003, and Tom Cholmondley, who shot stonemason Samson Ole Sisina at the Delamere Ranch in Naivasha in 2007, also had their guns withdrawn. Any Kenyan can apply for a firearm at the police station with a copy of your identity card and a certificate of good conduct.

    The District Security Committee meeting will then consider the application before forwarding it to the Provincial Security meeting and the Police commissioner for approval after which a firearm is issued. The owner of the firearm is required to carry a firearm certificate. In the event of misuse, the local police chief should demand that the owner surrender the firearm.

  • I think that the analysis presented by the writer, while very eloquent, does not even begin to present the complexities of Kenyan politics or the effect of the global economy on Kenya. The president is not a “captain-save-a-me” corruption has been ingrained in Kenyan politics since time immemorial, and as Obama’s struggles with republicans has shown legislation is not a matter of presidential decree. Kibaki implemented a limit on the presidency and has reduced much of the powers held by politicians with the new constitution. Give credit where it is due. I have lived in Kenya all more life and the role of the government has evolved and more and more entrepreneurs are being supported in their bid to start their own businesses. Our politicians are ALL corrupt and not only the president, but unlike most he has implemented some very critical legislature that has frustrated or at least made it somewhat harder for them to get away with their deeds. The Kenyan private sector is growing even in these GLOBALLY recessionary times. I feel that you really haven’t focused on the impact that the global recession has had on the Kenyan economy especially when it comes to high oil prices which ofcourse were exacerbated by a lack of action by the CBK.

    I am extremely disappointed by the one-sided analysis, but then again this is a Kenyan Diaspora blog which ,as always,reflects ideology that has been gained from years of living in developed countries. Yes we are supposed to aim high and yes there are problems with our country but please give a more objective analysis of facts that are actually on the ground. The role of the diaspora is increasingly being relegated to the critic next-door. Next time please show us the positive imporvements in the Kenyan economy. Your analysis reeks of someone who is comparing there home country to their new adoptive one.

  • @Philip Mugendi

    That is the most ridiculous assertion that I have ever heard. The death toll was immense on both sides and fueled by leaders on both sides. This weird obsession with kikuyu’s is ridiculous, Kibaki was in power for 5 years Moi in power for 24 years and Kalenjins and Nandis still claimed to be marginalized since independence. Kenya has room for everyone to grow, Kikuyu’s form 25% of the population and so ofcourse any success they may have will be on a larger scale or greater numbers since there are more of them. Needless to say, your diatribe is senseless, baseless and illogical and frankly bordering on tribal incitement. We are all Kenyan and lots of KENYANS lost their lives during the post election violence both Kikuyu’s and Luo’s so stop trying to play the blame game.

  • Nimo23:

    You have very good points but they are irrelevant within the presented context. President Kibaki pledged to stamp out corruption, yet with all the available resources, he failed to do so. Kenya’s corruption is endemic because he has encouraged it throughout his term in office.

    There is no doubt Kibaki has done a lot in advancing macro-economic growth, but its impact has not penetrated all corners of the country. I blame this on his hands-off approach to governance. Inasmuch as he is not there to “save the country”, a bit of direct supervision and a demand for outcomes would have made a big difference among poor Kenyans.

    It pays to be a benevolent dictator in a basket case like Kenya. For instance, why did Kibaki support Professor Ongeri when the forensic audit for free primary education (FPE) pointed to grand theft in the Ministry of Education? There is a possibility that all those officers recommended for prosecution will walk scot-free. In an earlier piece at KSB, I supported Kibaki’s political will to implement the FPE, but criticized him for not overseeing the processes that have been hindered by grand corruption. His poor record in fighting corruption equals or surpasses that of former president Daniel arap Moi.

    My discourse is not one-sided, but specifically mentions facts which challenge Kibaki’s model of leadership in enacting policies. I wish you could single out the skewed parts to make it clearer.

    Anyway, I am concerned about the paradox of “over six per cent economic growth” which does not resonate with the general rising poverty levels. Last Christmas for instance, many families could not afford the basic goodies that accompany the season; traveling to the countryside, eating chapati and chicken, etc. These are basic indicators which reflect the dire economic times faced by the poor. It was unbelievable to hear a section of Kenyans saying on KTN news then, that they missed former Dictator Moi’s era, when they could afford basic consumer commodities, unlike now.

    • Kenya’s high oil prices versus the global recession:

    Last year, some MPs and members of civil society singled out the National Oil Corporation of Kenya and the Energy Regulatory Commission as the institutions which had failed to protect consumers from high fuel prices.

    On April 19, 2011 John Ngirachu posted an article in the Nation newspaper titled, ‘MPs: Graft behind high fuel prices’. He cited Kenyan MPs who blamed high fuel and food prices on ‘grand corruption and the inefficiency of the energy sector. “A cartel of oil marketers” was the main reason for the high fuel prices, according to MP Ababu Namwamba. They acted as the importers, distributors and retailers of oil products in the country and it was necessary that reforms are put in place to protect consumers.

    The Energy ministry was accused of ignoring “the recommendations of an inter-ministerial task force constituted in 2006 to investigate cartel-like behavior in oil marketing companies”, added Namwamba. MP Martha Karua asked: “How come the minister of Energy does not seem to know that the Energy Regulatory Commission is not performing its job? Is it that those who are comfortable are laughing at the poor?”

    Energy Minister Kiratu Murungi defended by saying that external factors were behind the rise of oil prices in Kenya, i.e. increase in the price of crude oil. He also blamed it on the Kenyan shilling’s depreciation.

    It is therefore clear from Ngirachu’s piece that graft and inefficiency are key factors in Kenya’s high oil prices, other than the global recession.

    Kibaki’s sunset days as president are here, so it is time to appraise his managerial skills to understand why many government institutions remain basically inefficient in service delivery. He should have stood firmly by his pledge to propel Kenya to the vision he had in 2002, regardless of the political chaos. He had the old Constitution that gave him absolute powers to stamp out corruption, but he let it grow into a trademark. In this case, I insist that he has failed.

  • @Nimo23 you have answered Philip Mugendi incorrectly.You are out of order and should learn to reply the right person.

  • Kibaki's voodoo economics

    @nimo23 – The Kibaki administration

    Mwai Kibaki was elected president in December 2002 with over 62% of the vote. The country’s foreign backers were only too quick to salute the polls as “a triumph for democracy”. In a way they were right – the polls had been free and fair, and the candidate for change had been elected. But in another way this was a hasty form of wishful thinking because the ostensible “de-tribalisation” of the election had been due more to a series of fortuitous coincidences than to a real decline in the appeal of ethnic politics.

    The key words in the campaign, however, had been “hope” and “change”, and to some extent the new Kibaki administration managed to deliver the goods. The economy did pick up and Kenya witnessed a spectacular economic recovery, largely based on Keynesian economic recipes and helped by a favourable international environment.

    This can be illustrated by the annual rate of growth in 2002-07, which reveals a gradual improvement from -1.6 % in 2002 to 2.6% by 2004, 3.4 in 2005, and an estimated 5.5% in 2007. But this was only one side of the economic coin. Social inequalities also increased; the fruits of economic growth went disproportionately to the already well-off (and, among those, to the Kikuyu well-off); and corruption reached new heights, matching some of the excesses of the Moi years. When John Githongo, the man appointed by President Kibaki to fight corruption, blew the whistle in January 2005, he had to flee to Britain in fear of his life (see Michael Holman, “Kenya: chaos and responsibility”, 3 January 2007). Githongo is himself a Kikuyu, and his denunciation of a massive series of financial scandals in which hundreds of millions of dollars had vanished was seen as a betrayal of his tribe as well as of the government he served.

    By Gérard Prunier, 7 January 2008

  • How greedy officials killed a dream meant for youth

    By JULIUS SIGEI Posted Friday, June 1 2012 at 22:30
    A fund set up six years ago to alleviate run-away youth unemployment in the country ended up becoming a cash cow of select government officials, a new report shows. Read (Otuoma told to step aside over lost cash)

    The multi-billion shilling Youth Enterprise Development Fund, commissioned in 2006, was systematically looted by corrupt government officials through fraudulent claims, inflated prices and circumventing of procurement procedures.

    The Saturday Nation this week obtained the fund’s internal audit report detailing the misappropriation of millions of shillings in fraudulent claims.

    The audit report found questionable imprest claims and payments, including one instance when Sh80,000 was allegedly spent on buying mandazis in one morning, as well as lost millions in questionable procurements.

    A purchase of 210 motorcycles to be used by constituency officials of the fund led to a further loss of Sh10 million.

    “In the first tranche, the fund purchased 110 motor cycles each priced at Sh289,500. The specification, according to the local purchase order number 08803870 of October13, 2010, was Honda XL 125 SL Japan. But the invoice received by the fund from Ryce Motors dated September 20, 2010 reflects Honda XL 125/200, which is different from XL 125 SL/200,” the report reads.

    For this, the fund spent Sh31,845,000 when it could have spent Sh29,348,000 if it had gone to Toyota East Africa, the report says.

    In the second tranche, a loss of Sh7,670,000 was incurred after 100 motor cycles were sourced from Ryce East Africa Ltd, who supplied XL200 Japan motorcycles at a unit price of Sh343,500.

    The specified type would have cost Sh266,800 per unit, saving Sh76,700 which the fund lost per unit.

    The audit also queried the economic viability of a higher engine capacity of 200cc instead of the recommended 125cc.

    “Even then, the delivery of 110 motor cycles, the payment voucher of Sh15,922, 500 could not be found for verification,” the report reads.

    A further loss of Sh446,600 was incurred through the purchase of batteries.

    Training sessions were another conduit through which the money was siphoned out.

    The audit team queried the examination and analysis pertaining to the business development services noting, that the pre-disbursement trainings were shrouded in mystery, and casting doubt on the authenticity of surrender documents and occurrence of the activities.

    “It was also noted that the entire amount of Sh4, 231,000 spent on agri-business sensitisation could not be accounted for. The audit team also notes cases of exaggeration of fuel consumption and misuse of work tickets and falsification of youth payment schedules by officers of the Fund.”

    The audit team also noted that county sensitisation expenditure was mangled in fictitious receipts, doubtful names, signatures and identification numbers of participants.

    “Even where lunch was provided, officials went ahead and bought lunch for participants,” the report reads.

    The tendering process was also circumvented with the evaluation committee overstepping its mandate by asking the tender committee to redo the long list to include a particular company it favoured.

    The audit report cites the case of Mucmar Management Concepts Ltd which, despite not prequalifying as required by law, eventually clinched a tender worth Sh2,444,500 to provide consultancy services.

    And in a bizarre inflation of prices, audit officials, who requested not to be named, told of cases in which the fund’s stickers were procured for up to Sh17,000 each, instead of the Sh300 market rates.

    Three stickers were placed on each motorcycle, translating to Sh51,000 per motorcycle on stickers alone, enough to buy an extra boda-boda motorcycle for youths.

    In some cases, the lunch budget was inflated up to six times.

    For instance, a lunch that ordinarily costs Sh200 cost the fund Sh1,200 during a training session in Manyatta.

    Travel refunds for training sessions in North Imenti and South Imenti cost 2,000 per participant, which was five times above the budget.

    Fictitious travels by senior managers who raked in hundreds of thousands of shillings through per diem payments were also noted.

    Falsification of participants’ identities was also common.

    For instance Sh1,335,500 advanced to a senior research and policy officer who had travelled for an Upper Eastern pre-disbursement training could not be accounted for.

    The fund has received Sh3.8 billion from the Treasury since its inception six years ago. It was formed after the 2005 referendum on the Constitution, which the government lost.

    “The government was apprehensive after the loss and it decided to form something to attract the youth and avoid the same situation in the 2007 elections,” an officer said.

    The fund lists organising youth trade fares, building sheds and stalls for the youth, starting a mandatory pre-financing training for youth and helping them form savings and credit societies as its flagship achievements.

    It has so far disbursed Sh5.4 billion to 148,000 youth groups, trained 2,500 young people in 24 constituencies, and helped 6,000 young people to secure employment abroad, especially in the Middle East.

    When it was formed, there appeared to be a hurry to roll out its programmes to stem the impatience of jobless youth.

    This meant that proper structures were not put in place to prevent pilferage by officials.

    The audit followed an anonymous memo dated December 21, 2011 to the board of directors from a group of 15 employees (who withheld their names).

    The letter raised various allegations, among them financial impropriety, incompetence and abuse of office.

    The investigation was launched into the allegations levelled against the chief executive and six senior managers from February 6, 2012.

    The fund’s chief executive, Mr Juma Mwatata, could not be reached for comment yesterday as he was said to be attending an International Labour Organisation meeting in Geneva, but public relations officer Benson Muthendi told Saturday Nation that most of the allegations had been explained by the management.

    “No money was lost. When an auditor queries certain purchases, it does not necessarily mean money was stolen,” Mr Muthendi said.

    Eight senior managers have, however, been suspended pending investigations.

    They include the finance manager and the manager in charge of lending and investment. Two other managers have since resigned.

    The Ethics and Anti-Corruption agency confirmed that it has begun investigations, but sounded the alarm that some suspended officials were interfering with evidence.

    “We are receiving relevant and useful information, which is assisting investigators. The investigation is complex as it involves travelling around the country. Some officials have destroyed evidence but we are making good progress,” Mr Simani told NTV.

    He could not divulge to Saturday Nation who the commission was investigating.

    “The commission is still analysing data and at this stage of investigations we cannot name names,” Mr Simani said.

    This is not the first time an initiative to address youth unemployment is getting into problems.

    Only last week, the fund denied allegations that it lost Sh150 million in dealings with the Kenya Union of Savings and Credit Co-operative Organizations (Kuscco).

    Youth Enterprise Fund board chairman James Gitau on Wednesday told journalists that the fund was within its mandate in all its dealings with Kuscco.

    The partnership agreement was signed in February, 2011 with the first disbursement of Sh75 million being done in the first week of April, 2011 — seven months after the proposal was made, a delay Mr Gitau argued was occasioned by the need to carry out due diligence before drawdown.

    “Contrary to what has been said, the loan exposure with Kuscco as at now is covered 200 percent by a bank guarantee from the Cooperative Bank. The guarantee is for Sh300 million, whilst the fund has only released Sh150 million,” he said.

    Through direct sourcing

    Kuscco was one of the partners sampled, which did not pass through procurement, according to the audit.

    Others were Ramat, Wananchi Sacco, Magtech Inspiration Centre, Thika Training Centre and Amiran.

    Amiran and Kuscco’s partnerships were procured through direct sourcing, but the audit report faults the fund’s failure to report the same to the Public Procurement and Disposal Authority as required by law.

    On Friday, Amiran Kenya’s head of development and public relations, Gilad Millo, defended the deal with the fund, saying most of the services Amiran offered were specialised and were, therefore, sourced directly.

    “We have not broken any law. We offer crucial services in this country most of them directly sourced,” he said.

    In October last year, the Kazi Kwa Vijana (jobs for youth) programme suffered a jolt when the multi-billion shilling World Bank project intended to boost youth employment was cancelled.

    This was after an audit review revealed that officials at the Office of the Prime Minister had misappropriated millions of shillings.

    The World Bank had offered a grant of Sh4.3 billion ($43 million) to support the Kazi Kwa Vijana scheme.

    About 190,000 youths were supposed to have benefited from the latest phase of the initiative, which was expected to have been significantly expanded due to the financing from international aid agencies.

    But a World Bank financial management review found that millions of shillings meant for young Kenyans had instead been paid to a number of senior officials in the PM’s office in contravention of the agreement between the bank and the government and in breach of procurement procedures.

    The review identified a number of officials who had spent up to Sh37.5 million on seminars, which never took place, illegal allowances and payments to companies for services that do not appear to have been rendered.

    Youth Affairs Minister Paul Otuoma has consistently denied allegations of impropriety in the management of the Youth Enterprise Fund.

    “The fund did not have the capacity to reach out all over the country and we had to leverage with financial intermediaries that had the infrastructure and Kuscco applied after having fulfilled the conditions,” Dr Otuoma explained to Parliament last week.

    National Youth council delegates now want the Mr Mwatata to step aside over the matter and have threatened to camp at Harambee Avenue to pressure President Kibaki and Prime Minister Raila Odinga to intervene.

  • SHATTERED DREAMS: An Audit of the Kibaki Government’s Anti-Corruption Drive 2003-2007

    Click to access Narc%20Audit.pdf

  • Kibaki promoted corruption

    Report: Kibaki failed to stem corruption
    Updated Tuesday, February 26th 2013 a 00:00 GMT +3

    By Ernest Ndunda

    Mombasa, Kenya: President Mwai Kibaki’s administration has failed to fight corruption in the past one decade, a new survey reveals.

    The new study by Transparency International (TI) Kenya says that most Kenyans believe Kibaki had powers to fight graft but had failed to do so in the last ten years. The national opinion report dubbed ‘Stuck on a Treadmill’, evaluates progress on anti- corruption during Kibaki’s tenure.

    Launching the report in Mombasa on Monday, TI Executive Director Mr Samuel Kimeu said 85.7 per cent of Kenyans believe Kibaki failed to use his powers to stem mega scandals like Anglo-leasing.

    Kimeu said this perception clearly implied that Kenyans had no confidence in the institution of the presidency to render critical support to anti- corruption issues.

    The random interviews of 1,788 Kenyans conducted between January 17 and February 8 this year established that anti- corruption crusades have not been comprehensive and participatory enough to win public confidence.

    Negative events

    “Our survey further showed that Kenyans’ confidence in the President in fighting corruption had been diluted by negative occurrences in terms of perceived lack of Government commitment or the grand corruption scandals that have continued and remain unresolved alongside reform efforts,” said Kimeu.

    The TI official says 67.8 per cent of Kenyans believe the many commissions of inquiries formed in the last 10 years had been ineffective.

    “Reason to the ineffectiveness is that most of the findings are not made public. Most of the respondents interviewed were for the opinion that no action is taken once the reports are completed,” said Kimeu.

    He noted that the findings are usually not conclusive, nothing is recovered from suspects and recommendations are never implemented.

    The 10th and 11th Parliaments were adjudged harshly for failing to fight corruption.

    The report says that 62.5 per cent of Kenyans felt that the Parliament was a big let down in beating graft.

    The police force was ranked top for failing to stem the vice.
    http://www.standardmedia.co.ke/?articleID=2000078119&story_title=Kenya-Report:-Kibaki-failed-to-stem-corruption

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