Untitled - Africa Centre for Open Governance

Responding to a question by private notice by MP John Mbadi, the Assistant Minister, Office
of the Deputy Prime Minister and Minister for Finance Oburu Odinga, confirmed that on 24th
October, 2011, the Permanent Secretary, Treasury, wrote to the Country Director of the World Bank
committing to refund to the International Development Agency (IDA) and other development
partners the following funds spent on payments that were verified and confirmed to be ineligible 67 :
• Arid and Semi-Arid Resources Management Project (Ministry of State for the
Development of Northern Kenya and Other Arid Lands) - KES 40 million refunded
• Kenya Education Sector Support Project (Ministry of Education) - KES 347, 972,827.38 was
refunded, leaving a balance of KES 2, 192,202,728.38 for the Fast Track Initiative to be refunded
later in the current financial year.
• West Kenya Community-Driven Development and Flood Mitigation Project (Ministry
of State for Special Programmes) - KES 8.7 million refunded. KES 42.1 million to be refunded
later in the year.
• National Statistics System Project (Ministry of State for Planning, National Development
and Vision 2030) - KES 42 million refunded.
The practice raises concerns because the Government appears to be officially underwriting
corruption and misuse of funds by its officers. Meanwhile, the services, which the funds were
supposed to pay for are not provided and citizens have to dig deeper into their pockets to fill the
fiscal gaps left by the refunds.
4.2. Procurement
Corruption is the most problematic factor for doing business in Kenya. 68 It increases the cost of
doing business, adds to the cost of public tenders and leads to poor standards of project work.
A majority of all cases before the EACC have had a procurement element. In particular, public
procurement in Kenya has been the subject of corruption in the form of diversion of public
funds to companies, individuals, or groups and government officials’ favouritism towards wellconnected
companies and individuals when deciding upon policies and contracts.
The Public Procurement and Disposal Act (PPDA), was enacted in 2005 and became operational
on 1st January, 2007 with the gazettement of the Public Procurement and Disposal Regulations,
2006. The PPDA created the Public Procurement Oversight Authority (PPOA) mandated with the
responsibility of:
1. Ensuring that procurement procedures established under the Act are complied with;
2. Monitoring the procurement system and reporting on its overall functioning;
3. Initiating public procurement policy; and
4. Assisting in the implementation and operation of the public procurement system by:
• Preparing and distributing manuals and standard tender documents,
• Providing advice and assistance to procuring entities, and
• Developing, promoting and supporting training and professional development of staff
involved in procurement
67 Hansard, “Kenya National Assembly Official Report,” 15 November 2011
68 World Economic Forum, “The Global Competitiveness Report 2011-2012,” http://www3.weforum.org/docs/WEF_
GCR_Report_2011-12.pdf, (2011)
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