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Kenya could lose Sh3bn US funding over graft

Sunday January 26 2020

President Uhuru Kenyatta, Donald Trump

US President Donald Trump shakes hands with Kenyan counterpart Uhuru Kenyatta at the White House, Washington DC, on August 27, 2018. PHOTO | JOAN PERERUAN | NATION MEDIA GROUP 

AGGREY MUTAMBO
By AGGREY MUTAMBO
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Kenya’s persistent corruption blot may hinder its early access to a US multimillion-dollar development programme.

Nairobi is ranked 137 out of 180 countries on the latest Corruption Perceptions Index published by global watchdog Transparency International, indicating that despite the latest push to combat the vice, the war is far from being won.

With prevalent bribery and kickbacks in tendering and a police service clamping down on protesters, the US government suggests that Kenya’s access to funding for poverty alleviation programmes may be delayed.

In an interview with the Sunday Nation, Sean Cairncross, chief executive officer of the Millennium Challenge Corporation (MCC), said Kenya is eligible for funding this year, but it must demonstrate obvious improvements in governance.

“One of the hurdles on our scorecard is the corruption indicator and so we recognise that in creating a dynamic economy and a market that is going to benefit the citizens of a country and reduce poverty through economic growth, corruption is a major constraint,” Mr Carincross said in Nairobi on Thursday.

 “With respect to Kenya, that is one of the issues that we are engaged on. We are kicking off programme development, so we don’t have yet a programme design and don’t know what that is going to look like.”

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The leader of the US agency that says it applies a “new philosophy” to development aid was in Nairobi as part of an assessment to determine areas of need and funding structure, a process he said could take several months to be approved.

Last November, Kenya and Mozambique were prequalified for programmes targeting the poor as well as reforms in key departments. Further assessments based on indicators by the World Bank will determine when the money will be made available and who the recipients will be.

Kenya was qualified for the MCC Threshold, which means that once assessors approve of its progress on good governance indicators, Nairobi could access as much as $30 million (Sh3 billion) to run a three-year programme. According to MCC, the selection of Kenya for the programme is part of the US government’s efforts to reform institutions long clogged up with inefficiency.

If approved, the funding for Kenya from MCC could be the first in nearly a decade. The country routinely failed on certain indicators of “ruling justly”. Kenya received $12.7 million (Sh1.27 billion) from MCC between 2007 and 2010 — during the Mwai Kibaki presidency.

According to a programme profile provided to the Sunday Nation, the money went to changing procedures at the Kenya Medical Supplies Agency, the principal State organisation charged with supplying drugs to public hospitals, to reduce corruption in procurement and stock taking. After the programme ended, however, MCC indicated the government had slackened in the criteria and didn’t approve any further programmes until now.

 “We are going to go through a process of several months of diagnostics and design to determine specifically how it is going to look like. There will undoubtedly be institutional and policy reform focus that is going to target corruption,” he told the Sunday Nation.

Since 2010, however, Kenya has introduced county governments which means that the assessment will now involve both levels of government. Mr Cairncross indicated the lessons learnt in the first programme will drive the new way of working this time round.

“It is an iterative process for us to learn to do things better.

“One of the things that we learn is to bring on board real private sector engagement because without that you are not going to have a sort of real economy that is going to benefit the entire population.”

The full interview touching on other issues is available in the East African.