Special Kenya team probes mystery millions

A special team has been set up to investigate the source of billions of shillings flowing into the country in recent months. The team has been formed by the Central Bank of Kenya and the Kenya National Bureau of Statistics.

The source of the mystery billions in hard currency could thus be known in a matter of months. And Planning minister Wycliffe Oparanya has warned that the influx of billions of shillings will hurt the economy.

He said claims that Sh164 billion had entered the country was cause for alarm. “The effects are already being felt as prices of properties have shot up,” he said in Nyanza. There is speculation that this money may be ransom paid to Somali pirates in the Indian Ocean.

On Sunday, the director of research at the Central Bank of Kenya, Mr Charles Koori, disclosed that the special technical team would conduct a new survey on informal cross border trade with a view to discovering whether it was the source of the cash.

Government statisticians have been grappling for answers to an unprecedented spike in money coming into the economy, but whose sources are not known.

According to the latest balance of payments statistics published by the Central Bank, the money from unexplained sources rose to Sh164 billion in January this year.

This has fuelled concerns that Kenya may be turning into a preferred money laundering destination for criminal elements in the region—including Somali pirates.

Mr Koori said the results of the special survey would complement information on merchandise trade as reported by customs authorities.

The Central Bank official also revealed that the Bureau of Statistics would now be reporting the country’s balance of payments more frequently as opposed to the current practice where this is done annually.

Provisional figures

He explained that although the Central Bank reported the country’s balance of payments on a monthly basis, these were mainly provisional figures captured through commercial bank transactions. Mr Koori said several other measures would be taken to investigate the mysterious sources of the billions.

He revealed that a tourism satellite account survey had just been conducted to give a more accurate picture of tourism inflows. A foreign private capital survey was conducted between January and March 2010 and results are expected by the end of July.

On top of this, the national statistics bureau has just completed a foreign direct investment study. The official said the Central Bank was also strengthening the systems it used to track international foreign exchange flows into the country.

Forex bureaux

Already, he explained, the CBK was conducting monthly surveys on remittances from Kenyans in the diaspora. It is based on information collected from formal channels, including commercial banks and other licensed international money transfer services.

Information on forex bureaux was also regularly captured through data submitted by commercial banks in CBK’s monthly foreign exchange surveys.

With regard to inflows from donors, the CBK says it will request commercial banks to report regularly on money which donors give directly to non-governmental organisations—but which is currently not captured in official flows.