Kabura firms registered as disadvantaged contractors

What you need to know:

Josephine Kabura's firms are said to have received Sh1.29 billion from the NYS in a series of fraudulent transactions.

Seven of the 20 companies used to siphon Sh1.2 billion from the National Youth Service (NYS) are listed among those eligible for preferential access to government tenders, revealing how influential contractors are using the affirmative action policy to line their pockets with public funds.

The companies, all of them registered under the name of chief NYS scam suspect Josephine Kabura, are listed under the Access to Government Procurement Opportunities (AGPO) register of firms owned by marginalised groups and qualify for special access to government tenders.

The Kabura firms are said to have received Sh1.29 billion from the NYS in a series of fraudulent transactions that took place in a span of two years.

Government institutions are legally required to set aside 30 per cent of total procurement for the youth, persons with disability and women-owned firms as part of an affirmative action policy to uplift the marginalised groups.

“It (AGPO) is affirmative action aimed at empowering youth, women and persons with disability-owned enterprises by giving them more opportunities to do business with Government,” the Treasury says in an official statement posted on its website.

Ms Kabura, who has been singled out as a key participant in the multi-billion shilling theft of public funds, is the owner of Tucking Stitch Emporium, Big Kent Company, Critical Mass Electrical, Essential Prodigy Trading, Reinforced Concrete Technologies, Roof and All Trading, and Form Home Builders – all of which are listed in the AGPO register.

Former President Mwai Kibaki initiated the AGPO programme to help youth from disadvantaged families set up businesses and compete for government tenders.

President Uhuru Kenyatta then expanded it to include women and persons with disabilities besides raising the threshold of tenders reserved for these groups from 10 per cent to 30 per cent.

The Public Procurement and Disposal Act defines “disadvantaged group” as persons denied by mainstream society access to resources and tools that are useful for their survival in a way that disadvantages them or individuals who have been subjected to prejudice or cultural bias.

But recent indications show that rich and influential individuals may be exploiting this programme to bag big tenders – ultimately deepening the rift between the rich and the poor and negating the original intention of empowering the disadvantaged.

In recent weeks, it has emerged that a firm associated with President Uhuru Kenyatta’s kin was among those awarded supply contracts by the Ministry of Health under the preferential access window.

READ: Kabura firms registered as disadvantaged contractors

Sundales International Limited has, however, defended its listing under the disadvantaged group, saying that it technically qualifies for the AGPO tenders by virtue of being owned by women, a position government operatives support.

“A Kenyan is a Kenyan and therefore anybody can conduct business with any institution as long as there is no conflict of interest,” said Health secretary Ceopa Mailu in the wake of a multi-billion shilling procurement scam in his ministry.

The firm, which was placed in the 2014 AGPO list, has since been removed from the revised 2016 list. Estama Investments Limited, a firm that won a Sh1 billion tender to supply mobile clinics, is also listed under AGPO.

The firm is listed under the women-owned enterprises even as questions of its eligibility continue to arise. A statement from the Registrar of Companies shows that Estama is owned by Ambrose Makanga and Esther Wahito on a 50-50 basis.

Regulations indicate a firm must have a 70 per cent minimum membership of women, youth or persons with disability to qualify for registration under AGPO.

The inclusion of Ms Kabura’s firms indicates that influential contractors may be registering proxy firms that are awarded the contracts reserved for AGPO in a short-circuit of the initiative.

A World Bank report released earlier this year indicates that nearly one in every five Kenyan youth of working age has no job.

Unemployment among Kenya’s youth is now estimated to stand at 17.3 per cent.