Economy

US links loss of Kenya State tenders to graft

President Uhuru Kenyatta

President Uhuru Kenyatta addresses the nation from State House, Nairobi on March 12, 2021.

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Summary

  • The US has decried graft in government tenders in Kenya, saying it locked out qualified American firms from undertaking projects in the country.
  • The US Trade Representative’s office (USTR) claimed that some rogue public officials in Kenya manipulated tender bids to suit their interests and those of their cronies.

The US has decried graft in government tenders in Kenya, saying it locked out qualified American firms from undertaking projects in the country.

The US Trade Representative’s office (USTR) claimed that some rogue public officials in Kenya manipulated tender bids to suit their interests and those of their cronies.

“US firms have had limited success bidding on government tenders in Kenya. There are widespread reports that corruption often influences the outcome of public tenders, and many of these tenders are challenged in the courts,” it said.

“Foreign firms, some without proven track records, have won government contracts when partnered with well-connected Kenyan firms,” the agency responsible for developing and promoting American trade policy added.

The US is keen on transparency in public procurement in Kenya ahead of a new free trade deal between these countries.

The graft claims by the US are likely to shine more spotlight on Kenya procurement systems which have long been linked to brazen manipulation by some State officials.

Rattled by outcry over fraud in public tenders, Kenya in January 2019 opted to migrate all public tenders and procurement transactions to the Integrated Financial Management Information System (IFMIS), an electronic tool.

The IFMIS became the technology through which government runs national finances, from planning through budgeting to procurement, payment, accounting and reporting. It helps in reporting by the Controller of Budget (CoB) on how and on what tax resources are spent nationally and in the counties. It forms one input into the Auditor-General’s own annual review and audit of these accounts.

The USTR, however, said that since the IFMIS was launched in 2014, there have been complaints about insufficient connectivity and technical capacity in county governments, apathy from county officials, and central control shutdowns.

“Moreover, IFMIS has security gaps that make it vulnerable to manipulation, including the duplication of authorised users’ identities and non-users’ ability to remotely access IFMIS,” it said. “Corruption is widely reported to affect government procurement tender processes at both the national and county levels. The Government has not implemented anticorruption laws effectively,” the agency added. Transparency in reporting of public tenders remains problematic amid resistance by some State agencies and departments to disclose information.

Mid-2018, Head of Public Service Joseph Kinyua asked accounting officers in ministries, departments and agencies to consolidate and publish tender information on a special website on the 15th of every month.

The information on the portal should include the basis of awarding the tenders, parameters of assessment, names and details of tender committee members as well as the value of each contract.

A recent report by the Public Procurement Regulatory Authority (PPRA) – the official procurement watchdog – however shows that most State agencies continued to ignore the directive during the 2019/2020 financial year where tenders worth Sh232.77 billion were published on online portal.

“The authority has continued to monitor implementation of these directives through preparation of reports to Parliament and the National Treasury and Planning… Despite these, the level of compliance has continued to be poor,” the PPRA said, noting that as at June 30, 2020, only 433 procuring entities had been registered on the portal.

The report shows that about 43.47 percent of the ministries, departments and agencies (MDAs) had not complied with the executive order by the end of the last financial year.