This archive report was first published on 24 September 2019.
On September 24, 2019, President Uhuru Kenyatta made a wise decision by cancelling the scandal-ridden Kimwarer Dam project. However, this move has left taxpayers with a significant burden, as they are now responsible for paying massive dollar-denominated liabilities.
According to suspended Treasury Cabinet Secretary Henry Rotich, the government had contracted a finance facility that required a Sh23 billion advance payment to contractors. As of November 6, 2018, the Treasury had released Sh3.5 billion for Kimwarer. Additionally, the government had already paid Sh5 billion to the Italian export credit agency SACE, and more billions were released for various fees, including commitment, management, and agency fees.
The Director of Public Prosecution has also revealed that an additional borrowing of Sh40 billion was committed to advance interest payments on the loans for both Kimwarer and Arror dams.
The Kimwarer scandal offers several lessons about the current state of corruption in Kenya. Firstly, it highlights the hypocrisy of Western countries and China, which have turned their export-import agencies into institutions that facilitate corruption in Africa. SACE, in particular, is at the center of these questionable transactions.
Export-import agencies were established to provide insurance services to companies doing business abroad, but in Africa, they have become a means for companies to bribe their way into getting contracts and to avoid accountability.
The ordinary man and woman in Africa ends up paying the price for these corrupt practices, with massive debts for overpriced and poorly planned projects.
The Kimwarer saga also reveals why international contractors prefer financial deals with huge advance payments. It is ironic that billions of taxpayer shillings were released before a single spade was lifted, and that the Treasury was prepared to release billions to a broke Italian contractor despite the lack of basic requirements such as land acquisition and degazetting.
These practices highlight the need for transparency in public projects and the importance of competitive bidding. The State should ban all MoUs and commercial agreements signed by ministers to prevent similar scandals from occurring in the future.
