US graft shocker in new trade deals with President Ruto


President William Ruto and US President Joe Biden. FILE PHOTO | POOL

Public officials charged with corruption offences stemming from American-funded projects and investments in Kenya will be removed from office as Washington adopts a carrot-and-stick approach in its trade and financing deals with President William Ruto’s government.

The US has made public some details of the trade deals it has been thrashing out with President Ruto, revealing priority areas for investment and commerce and also showing measures that Americans will take to protect their billions from officials with itchy fingers.

Negotiations are a build-up to the Strategic Trade and Investment Partnership (STIP), a bilateral agreement whose terms Kenya and the US started stitching together just weeks before the end of former President Uhuru Kenyatta’s term in office.

“The text mandates procedures for the removal of public officials who are charged with or convicted of corruption, along with measures to prevent opportunities for corruption by members of the judiciary,” the summary of US proposals to President Ruto reads.

“To prevent the hiding of ill-gotten gains, the text also includes a provision requiring the maintenance of a central register for companies to report beneficial ownership information.”

The talks were formally launched in July 2022 at a virtual meeting between former Trade Cabinet Secretary Betty Maina and US Trade Representative Katherine Tai.

President Ruto and Trade CS Moses Kuria have since taken over the bilateral talks, with the latter in April saying that talks are proceeding smoothly.

In return for the multibillion-shilling investments, Kenya will have to ensure that laws against bribing public officials, embezzlement, and money laundering are strictly implemented.

Kenya will also have to maintain up-to-date records and books of accounts, be aggressive with the recovery of assets derived from bribery or corruption under the projects and provide corruption reporting channels that will be expected to protect whistleblowers.

After being trained on spotting corrupt activities, public officials under US-funded projects will be expected to report any conflict of interest or graft-related acts.

President Ruto has also been tasked with sealing any loopholes that may be exploited to bribe Judiciary officers in cases that may stem from the funded projects.

The US also demands a bigger role of civil society and non-governmental organisations in the fight against graft.

“As combatting corruption requires the active participation of segments outside of the public sector, this text requires measures to promote the participation of enterprises, civil society, non-governmental organisations, worker organisations, and community-based organisations through public information and education programs, public awareness, and the dissemination of information concerning bribery and corruption,” the US said.

Additionally, the text includes a provision obligating government contractors to maintain a written code of business ethics and conduct and to exercise due diligence to prevent and detect criminal conduct.

Other aspects of the talks have seen the US propose to have industry regulators operate independently of the sectors they police.

Financial services sector regulators such as the Central Bank of Kenya and Capital Markets Authority will, however, be under a different set of rules to protect their unique responsibility to also ensure the stability of their respective industries.

This comes at a time President Ruto has issued a circular directing all Cabinet secretaries, accounting officers and CEOs of State corporations among other government employees to individually take the lead in the fight against corruption.

“You are personally responsible for any breach of the legal and policy provisions governing the exercise of your powers in the use of public resources,” a circular by Chief of Staff and Head of public service Felix Koskei dated June says.

Micro, small, and medium-sized enterprises (MSMEs) are set to be among the biggest beneficiaries of the trade deals, as the US intends to provide capital and training opportunities for Kenyans with businesses in that category.

Women, youth, minorities, start-ups, and agricultural and rural MSMEs will get top priority in funding and training opportunities.

Capital is expected to be provided in the form of low-interest loans and grants. Farmers will also reap big if the two governments agree.

The US intends to invest in food security programmes.

Growers using science-based solutions to ensure sustainable food production will be eligible for funding.

The agriculture initiative will also open doors for farmers to export their products to the US and other countries.

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