Is Corruption in Nairobi Grease or Sand on the Wheels of Economic Development in Kenya

Corruption remains a strong constraint on growth and development whilst others argue that corruption can be grease to the wheels and that it helps overcome cumbersome bureaucratic constraints, inefficient provision of public services, and rigid laws especially when countries’ institutions are weak and function poorly.

In places where bureaucracies and organizations are inefficient, corruption is said to improve efficiency and growth. Bribes can act like a piece rate or price discrimination and give faster or better service to the firms with highest opportunity cost of waiting. However, has this worked positively for African Countries? More so Kenya, where a quick review of Kenyan daily newspapers confirms that corruption is an urgent issue of concern for this country at all its levels (from national to the individual).

Corruption in Kenya has extended from the level of individuals to the institutional and structural levels and to our relief, the appointment of Mr George Kinoti as Director of Criminal Investigations and Mr Noordin Haji as Director of Public Prosecutions breathed a new lease of life in the war on graft, this move has seen public officials charged in court with the loss of billions between 2014 and 2019, and Nairobi’s Governor Sonko has not been spared, he has been accused of irregularly awarding tenders to his close friends , misappropriation of county funds among other charges.

State of corruption in Nairobi County

A closer look at the 2017 Nairobi’s audited reports, the Office of the Auditor-General expressed dissatisfaction with the evidence provided to support the presented financial statements. The expenditure that reflected a total of 1.8 Billion could not be explained. In the acquisition of assets expenditure 1.7 Billion was not accounted for as well only 61 million Kenyan shillings was verified as paid out to suppliers. In the same financial year, there were occurrences of unauthorized expenditure where 226 million was reallocated for use without formal approval from the County Assembly. Under Vehicle parking fees, 45 Million was missing that out of the amount said to be collected.

The expenditure that reflected a total of 1.8 Billion could not be explained.

Nairobi Ward Development Fund account was opened by the county executive and had 4.9 Million Kenyan Shillings and out of that 3.9 Million has not been accounted for, nor disclosed. Statutory deductions to Lapfund and Laptrust were not made thus incurring penalties.

It is evident that in the year 2017, the County Government of Nairobi was not compliant with regulation 90 (1) of Public Finance Management  (County Government) regulations 2015.

The County Government received free maternity reimbursement from the Ministry of Health amounting to about 281 Million shillings for various hospitals, however, even after receiving these funds, reimbursement was not made to hospitals thus affecting daily operations of the hospitals.

Under Development Projects, the Transport, Infrastructure and Public Works was allocated about 2.4 Billion Shillings, however nine months down, six projects worth 266 Million had not commenced and the ones that had started only 61 million was ascertained payment. There was also an increased number of stalled projects that were paid halfway and never completed, such as Ruai Street Children Rehabilitation Center, Joseph Kangethe Social Hall, Mji wa Huruma Social Hall. This goes to show that the residents of Nairobi County did not get value for their money in respect to the plans and money used by the county. Procurement records and documents of goods and services amounting to 40 million were not provided for verification . Furthermore, the procurement process was not Done through IFMIS.

Another alarming case is where Mbagathi and Mama Lucy Hospitals were holding drugs that were about to expire worth at least 1.5 million Kenyan shillings, the county incurs carrying costs and failed to get value of the taxpayer’s money for the expired drugs.

There were cases of underfunding Educational and Social Services that affected learning uptake from those institutions. The County Government moreover irregularly allocated County Land without enough reasons to Private Developers, a case of where High Ridge Health Center was demolished, and the land allocated to private developers.

In 2018, even after the Auditor’s recommendations, Nairobi County Government’s financial audit results were nevertheless not pleasing. The anomalies such as unaccounted cash withdrawals of 200 million shillings and an additional 6 Billion from the Revenue account, irregular payments of about 399 million shillings were made to suppliers through cash and not recommended IFMIS system, failure to deposit cheques to revenue account for up to a year.

The County Government of Nairobi made cash transfers up to 474 million shillings in form of scholarships and other educational benefits, however no supporting documents were provided to verify if indeed citizens benefited from the allocation.

In 2018 too just like 2017, the County Government of Nairobi failed to adhere to the regulations of the Public Finance Management (County Governments) in several ways including failure to achieve a 30% allocation on Development Budget, this has evidently impacted negatively service delivery to the residents of Nairobi.

Under Procurement of goods and services in the same financial year, 13 contractors were awarded contracts amounting to 420 million irregularly and documents to support the same were not provided which affected some of the ECDE project’s completion and consequently, it is hard to ascertain the exact value of realized in the implementation of all these projects.

The scourge of corruption in Kenya must be urgently addressed otherwise it could bring the economy to its knees. As things stand, Kenya is already struggling to pay its debts. Corruption compromises the quality of life of Kenyans and their development. It costs a fortune and its already draining our economy of the resources needed for projects like education, healthcare, agriculture and infrastructure development.

Finding Solutions

The heightened role of the media and social reformers have joined to create greater demand for accountability and transparency in Governments. Yet, the issue of accountability is particularly complicated for the public sector. When things go wrong for Government offices, it can often make front-page news – instantly transforming a management issue into a political problem that results in slow or no action altogether. Corruption builds and enhances poverty and exclusion. While corrupt individuals with political power enjoy a lavish life, millions of Kenyans are denied of their basic needs like food, health, education, housing, access to clean water and sanitation. Over time, this has been proven and manifested in most African countries. Better stewardship of resources would make it better for the government to provide basic services such as education, water, health and housing in a subsidized or affordable manner.

County Governments should consider involving the citizens of Kenya in managing public resources through the use of these innovative systems. Citizens need to stand up for themselves, and claim what is rightfully theirs,

Citizens today are more aware of their rights, have better access to information on public services and consequently have higher expectations of service levels. Platforms such as Usajili and Ugatuzi are looking for ways that can complement and enhance how citizens are able to get involved in the process of allocating, reviewing, tracking, and monitoring public expenditures. These initiatives look to increase greater efficiency in the allocation of resources and encourage less corruption and leakages. County Governments should consider involving the citizens of Kenya in managing public resources through the use of these innovative systems. Citizens need to stand up for themselves and claim what is rightfully theirs, for their sake, and the sake of future generations to come.

 

Source:

Report of the Auditor- General on the Financial Statements of Nairobi City County Executive for the year ended 30th June 2017

Report of the Auditor- General on the Financial Statements of Nairobi City County Executive for the year ended 30th June 2018