NAIROBI, Kenya, May 21, 2020 – Kiambu County former Governor William Kabogo has taken a swipe at donor agencies accusing them of being accomplices in the diversion of Kenya’s aid cash to foreign accounts.
Kabogo avers that it is impossible for foreign aid cash to be diverted to overseas accounts without the support by individuals within the disbursing agencies.
The former governor who is also an anti-graft crusader has demanded for an international probe into the activities of the donor agencies.
“This is not possible unless it’s done with the help of the donor Agencies as joint beneficiaries and as such they should be investigated alongside the treasury. Shame!!” lamented Kabogo on his tweeter handle.
He was responding to media reports that so far an estimated KSh328 billion worth of foreign aid to Kenya has been diverted to foreign accounts by unscrupulous individuals in the government
Despite Kenya being the fourth-largest economy by GDP in sub-Saharan Africa (SSA) after Nigeria, South Africa, and Angola, a World Bank study on foreign aid shows it ends up in the pockets of ruling elites in recipient countries rather than going to those that it is meant to help.
The World Bank’s study, Elite Capture of Foreign Aid: Evidence from Offshore Bank Accounts, published on February 18, came as a shock. The term “élites” is defined as ruling politicians, bureaucrats and their cronies in the private sector involved in aid-funded projects.
Despite the economic gains recorded by Kenya, the country faces an internal challenge that persistently undermines its development potential, being that its ruling elites’ appetite for corruption is unprecedented.
The amount of foreign aid diverted by Kenyan ruling elites is appallingly astronomical. For instance, between 1990 and 2010, Kenyan politicians and their cronies transferred US$3 billion. In Tanzania, the EAC’s second-largest economy, the elites siphoned off US$586 million.
Interestingly the US$3 billion stashed in offshore accounts for 20 years amounts to US$150 million annually.
In a country that experiences electricity power deficit in supply, that kind of money can build, for example, a power plant that generates electricity for an entire rural district.
Since independence, in successive governments, the ruling politicians, bureaucrats and their friends stash billions of dollars in secret offshore banks whenever foreign aid lands in Kenya country.
According to the authors, the research used quarterly information on aid disbursements from the World Bank in combination with Bank for International Settlements (BIS) banking statistics.
The BIS data provided the flows between aid recipients and final havens such as Switzerland and Luxembourg, where secrecy is paramount. However, political pundits opine that in the East Africa Community, the larger the economy, the more aid money the ruling elites captured and stashed into offshore foreign bank accounts.
So far, people in Kenya have been charged in major financial scandals. It is on record that legal breakthrough was attained after the unprecedented co-operation between Swiss authorities and Kenya’s Ethics and Anti-Corruption Commission.
Kabogo believes that fighting high-level corruption and recovering stolen assets stashed in offshore banks can only succeed if three parties are involved: aid donors, haven countries, and the states from which the thieving elites hail.
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