What IMF thinks on corruption in Kenya


Kenya is on the right path in the fight against corruption, The International Monetary Fund has said.

IMF Director for African Department Abebe Selassie has commended President Uhuru Kenyatta for spearheading the war against corruption, saying the country was well.

According to Abebe, the IMF is satisfied with the stable economic growth that averages between 5.5 per cent and 6.0 per cent as a result of the ongoing fiscal reforms that the Kenyan Government is implementing to ensure macroeconomic stability.

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“Because of this, Kenya is a leading light in terms of economic reforms and growth in the region,” Selassie said.

The Director for the African Department of the IMF spoke on Monday when he paid the President a courtesy call at State House, Nairobi.

During the meeting, the President and Mr Selassie discussed the relationship between Kenya and the Bretton Woods institution where they agreed on the need for closer cooperation.

President Kenyatta thanked the IMF for technical support it gives Kenya saying the institution plays a key role in the stability of country’s economy.

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He said the government is committed to a stronger partnership with IMF as it implements programmed that are geared towards uplifting the lives of Kenyans.

The IMF Director introduced Mr Tobias Rasmussen, the new IMF Kenya Resident Representative. Mr Rasmussen is replacing Mr Jan Mikkelsen whose tenure ended on September 13, this year.

President Kenyatta has assured the IMF officials that his door is always open for discussions that benefit the country.

“Our door is always open. I look forward to working closely with you,” President Kenyatta told the incoming Resident Representative.

Selassie was in Kenya to the launch of the IMF’s Regional Economic Outlook report for Sub Saharan Africa whose theme is “Navigating Uncertainty”.

Present at the meeting were Head of Public Service Joseph Kinyua, National Treasury PS Julius Muia and Geoffrey Mwau, the Senior Economic Advisor to the National Treasury CS as well as Musa Kathanje, Director of Macro and Fiscal Affairs at the National Treasury.

Authorities in the country have in recent times enhanced the war on corruption which saw former National Treasury Cabinet Secretary (Finance Minister ) Henry Rotich and six other top government officials arrested for economic crimes.

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During the arrest, the government also sought the extradition of Paolo Porcelli, the Italian director of construction firm CMC di Ravenna, as the Director of Public Prosecutions Noordin Haji moved on corrupt officials linked to the $443.2 million contracts awarded to the Italian firm for construction of two mega dams in the country- the Kimwarer and Arror dam projects.

Rotich and his Principal Secretary (National Treasury)KamauThugge’s arrest hit headlines on July 22, a day that also saw the shilling hit a 20-month low against the dollar whilst foreign-listed Eurobonds fell, as investors came to terms with the vacuum at Treasury.

The two principals presented themselves at the country’s Directorate of Criminal Investigations (DCI) headquarters in Nairobi before being arraigned in court the following day (July23).

They were charged together with Susan JemtaiKoech(PS East Africa Community), David Kimosop(Managing Director Kerio Valley Development Authority),Kennedy Nyachiro(Chief Economist and Head of Europe II Division),Jackson Kinyanjui(Director Resource Mobilization Department of National Treasury and Planning) and Titus Muriithi(Inspector General State Corporations).

According to the charges, the government officials together with the Italian company and its official engaged in a scheme to defraud the government US$244.4 million, in respect of the development of Kimwarer multi-purpose dam.

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It is the first time a Kenyan finance minister has been charged while in office. There has been two previous occasions where ministers have been charged but they had already vacated office.

The arrests came exactly one year after top officials at Kenya Power and Lighting Company (KPLC) were arrested (July 2018), over corruption.

DPP ordered for the arrest of the then bosses including former managing director Ken Tarus, his top directors and former senior managers over procurement of defective transformers and the irregularities in prequalifying 525 companies for labour and transport contracts.

They were accused of being involved in a US$43.4 million scam.

The President has maintained his stand against corruption saying those caught will face the law.

Kenyatta made a proclamation on Anti-Corruption in 2015 with his administration embarking on a programme to deepen the fight against corruption, through strengthening and resourcing the institutions charged with the fight against graft.

“There is no turning back on the war against corruption as it is a just war, a war to prevent misuse of public resources,” President Kenyatta notes.

Seven current and former Governors and over thirty Chief Executive Officers of State Corporations have been under active investigation or prosecution for various corruption related offences.

In several cases, banks and other financial institutions have been fined for breach of regulatory duty.

The Assets Recovery Agency has investigated 20 cases and preserved assets worth Ksh1.1 billion (US$10.6million). Assets worth Ksh72 million (US$693,641) were forfeited to the government last year.

Further, recovery proceedings of corruptly acquired property valued at Ksh7.5 billion (US$72.3million) were instituted. Additionally, assets worth Ksh2.5 billion (US24.1 million) were recovered while bank accounts holding Ksh264 million (US$2.5million) were frozen, pending determination of recovery proceedings.

On October 18, the Kenya Private Sector Alliance implored MPs to work with the private sector to help identify ways of increasing Kenya’s competitiveness and tackle corruption to attract more businesses to the country.

Speaking at the Second Speaker’s Roundtable with members of the 12th Parliament in Mombasa,KEPSA Chief Executive Officer Carole Kariuki said investors are attracted by the improvement in the ease of doing business ranking, but held back by Kenya’s bad ranking on competitiveness and Corruption Perception Index.

“If we improved on these three indices – ease of doing business, the competitive index and the bribery index –more companies will come to this country. We would create and retain more jobs and our GDP will grow,” said Ms Kariuki.

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Martin Mwita is a business reporter based in Kenya. He covers equities, capital markets, trade and the East African Cooperation markets.

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