Revealed: How corruption inflates Kenya’s budget deficit by Ksh352B
Corruption, procurement fraud and collusion are costing Kenya an estimated Ksh352 billion in additional borrowing needs, exposing how governance failures are worsening the country’s budget deficit and undermining economic growth, a new World Bank report has revealed. The estimate is derived from the World Bank’s finding that corruption and collusion are likely to have increased […]
A recent World Bank report has highlighted how corruption, procurement fraud, and collusion are contributing to Kenya's budget deficit by an estimated Ksh352 billion, or two percentage points of GDP. This fiscal burden stems from lost tax revenue, inflated public procurement costs, and weakened investor confidence. The report emphasizes that eliminating corruption could free up billions of shillings for development, reduce government borrowing, and help Kenya achieve upper-middle-income status.
Public procurement is identified as a significant area of corruption, with only 1.15% of GDP in detailed contract information published in the 2024/25 financial year. The Mombasa-Nairobi Standard Gauge Railway project is cited as an example, where Kenya's construction cost of US$7.6 million per kilometre is significantly higher than Tanzania's US$5.7 million and Djibouti's US$5.3 million, potentially due to governance challenges such as direct contracting and fraud.
The electricity sector also faces transparency issues, with only 24% of power purchase agreements undergoing competitive procurement, and competitively procured solar projects being 47% cheaper than directly negotiated agreements.
Brief written by urgent.news from People Daily Kenya's own syndicated text. Machine-written — may contain errors; check the original before relying on it.
