Grand theft leaves little for Kenyans to celebrate on world Anti-Corruption Day

Since the days of “toa kitu kidogo” (TKK) to the current era of chickens, Kenya has been increasingly witnessing an upsurge in the number of mega corruption scandals in both the public and private sector, cementing Nairobi’s dubious distinction as a hotbed of graft.

The emerging use of “chicken” to mean bribes perhaps befits the growing stature of the vice in Kenya, previously referred to as kitu kidogo (something small) or chai (tea).

The bribery moniker arises from the “chickengate” scandal where Smith & Ouzman, a British printing firm, paid Kenyan electoral and examination officials Sh50 million to win tenders.

These bribes were codenamed chicken and involved inflating prices by up to 40 per cent and price manipulation of tenders, according to a forensic investigation by the UK’s highly respected Serious Fraud Office (SFO).

As Kenyans mark this year’s International Anti-Corruption Day, a fresh study by audit firm KPMG shows that Kenya is losing more than Sh500 billion yearly, or about a tenth of its GDP, on bribery, creative accounting, wasteful spending, tendering fraud and other graft practices.

The list of mega corruption deals that gripped Kenya this year include the siphoning of Sh791 million from the National Youth Service (NYS), Sh200 million plunder at the Youth Enterprise Development Fund and the grabbing of a 134-acre piece of land in Karen by top government officials.

The public prosecutor has also ordered investigations into alleged misappropriation of Eurobond cash to the tune of Sh140 billion.
In the corporate sector graft sector, book-cooking is on the menu.

The Institute of Certified Public Accountants of Kenya (ICPAK) on Wednesday summoned chief finance officers to discuss mounting cases of book-cooking, amid a string of allegations of professional misconduct by audit firms.

“There is a lot of corruption in the private sector. Manipulating books is corruption. It’s a reflection of Kenyan society,” said ICPAK chief executive Patrick Ngumi.

“Collusion is not acceptable. Any partner/account caught in such will lose his practising licence,” warned Dr Ngumi.

PKF Kenya is currently being probed by the accountants’ watchdog and the Central Bank of Kenya over how it handled the financial statements of Imperial Bank. A forensic audit by FTI Consulting revealed the audit firm had covered up the scam at the mid-tier lender.

READ: Kenyan managers, CEOs admit their firms are cooking books

Other audit firms in the crosshairs of the regulator include Deloitte & Touche (Mumias, CMC Motors, Tuskys Supermarkets and Dubai Bank), PricewaterhouseCoopers (Uchumi) and Ernst & Young (Uchumi, Mwalimu Sacco - Equatorial Commercial Bank deal, East African Portland Cement).

Even sports federations are not spared, with football and athletics officials embroiled in allegations of bribery and mismanagement of funds.

Kenyan doctors were last year accused of receiving bribes from French firm Sanofi to prescribe its drugs to patients, according to a report after the company reported itself to US authorities.

John Githongo, a former anti-graft czar, says corruption in Kenya is becoming a new normal, as everyone joins the plunder party.

“Stealing has been normalised so eventually it is literally cannibalistic of our nationhood let alone State institutions,” said Dr Githongo in an interview with the Business Daily.

“It is costing Kenya dearly socially and politically. Corruption has never been worse,” he added.

Stung by the ballooning cases of corruption in government, President Uhuru Kenyatta last month declared graft a security risk to the region’s biggest economy.

After eight months of pussyfooting, Mr Kenyatta gathered courage to sack five suspended Cabinet secretaries – Charity Ngilu, Michael Kamau, Davis Chirchir, Felix Koskei and Kazungu Kambi – who are facing corruption allegations and charges.

He also sacked permanent secretaries facing graft charges including Peter Mangiti (Planning) and Nduva Muli (Transport).

Mr Kenyatta has personally admitted to the existence of powerful cartels in the government working at the behest of shadowy investors to clinch State tenders.

Devolution and Planning secretary Anne Waiguru in November quit office under a cloud of suspicion after the NYS scandal and revelations of the ministry’s asset register, which included sex toys, TV, piano and ball pens valued at Sh8,700 apiece.

The growing cases of graft have put the Ethics and Anti-Corruption Commission (EACC) in a tight spot, but the agency is blaming lack of resources for its lacklustre performance.

“The commission faces a number of challenges in the implementation of its mandate. These included human resource constraints, inadequate policy and legal framework, slow judicial processes and limited reach across the country for anti-corruption services,” said EACC chief executive Halakhe Waqo in the agency’s annual report to June 2014.

EACC said despite the above challenges, it had recovered assets valued at Sh2.06 billion in the year to June 2014 through court proceedings and out-of-court settlements.

The agency added that its sting operations helped avert loss of public resources valued at Sh5.6 billion.

Mr Waqo and the entire EACC secretariat are due to be vetted afresh to gauge their suitability to hold office under a new Bill signed into law by Mr Kenyatta in September.