An explosive report from the Auditor General has laid bare the rot at Kenya Fishing Industries Corporation. The findings reveal how corruption and mismanagement have crippled the Mombasa-based state corporation, draining millions of taxpayers’ money.
From unlawful allowances to questionable fuel expenditures, the corporation’s leadership has been accused of running operations with impunity.
The revelations not only expose financial irregularities but also highlight years of government failure to enforce accountability. Calls for urgent action are growing, especially with the corporation already marked for dissolution.
How the AG Report Reveals Rot at Kenya Fishing
The Auditor General’s report has exposed glaring irregularities at Kenya Fishing Industries Corporation (KFIC). The audit reveals systemic failures in financial management and governance.
At the center of the scandal is former deputy director of fisheries, Mikah Nyaberi. Seconded to KFIC as acting chief executive officer in 2021, Nyaberi unlawfully pocketed Sh250,000 monthly as acting allowance, in addition to his salary.
The allowance was meant for only six months, but he has received it for over two years. The audit estimates he earned more than Sh6 million in irregular payments.
The blame extends to the Ministry of Mining, Fisheries, Maritime Affairs, and Blue Economy. The ministry failed to appoint a substantive CEO, creating a loophole for Nyaberi to continue drawing the allowance in violation of public service rules.
The Auditor General noted that this contravened Part C 14 (1) of the Human Resource Policies and Procedures Manual, 2016. The rule clearly caps acting allowances at six months, making Nyaberi’s extended tenure illegal.
Dubious Spending and Missing Records
The report further reveals questionable spending of Sh41.6 million on goods and services. Of this amount, Sh2.4 million went to fuel, lubricants, and transport. However, no procurement records were provided. The fuel was allegedly drawn from a local service provider whose contract agreement could not be traced.
This omission violates Section 68 of the Public Procurement and Assets Disposal Act, 2015, which requires full documentation of procurement processes. By failing to produce the records, KFIC management left the door wide open for fraud and abuse of funds.
Equally alarming, the KFIC board blew through legal spending caps. The board allocated Sh14 million for expenses, representing 48 percent of operations and maintenance costs. This is far above the 5 percent limit set by a presidential circular issued in March 2020. The board therefore breached financial laws while wasting millions.
A Corporation in Collapse
The rot at Kenya Fishing is not limited to financial mismanagement. The Auditor General also flagged governance failures. KFIC lacks an approved staff establishment. This means there is no clear system to determine the optimal number of employees, handle promotions, or plan for staff development. Without these structures, the corporation has been operating in chaos.
The National Treasury has already listed KFIC among nine state corporations earmarked for dissolution. The government has judged that the corporation’s outdated functions no longer meet the demands of devolution. KFIC is set to have its responsibilities transferred to ministries and other state bodies.
KFIC’s struggles mirror those of many state corporations. A Treasury report noted pending bills amounting to Sh94.4 billion across several entities by March 31, 2024. Kenya Fishing Industries Corporation, Kenya National Shipping Line, Kenya Yearbook Editorial Board, Coast Development Authority, and others are all in deep financial distress.
The failures raise bigger questions about why taxpayers must continue to fund institutions that exist more to enrich officials than serve the public.
The Need for Urgent Action
The AG report confirms what many Kenyans have long suspected: KFIC is riddled with mismanagement and corruption. While the government’s move to dissolve the corporation is a step in the right direction, accountability must not end there.
Officials who oversaw irregular allowances, dubious procurement deals, and wasteful spending must face justice. The public deserves to see action taken against individuals like Nyaberi and the board members who violated financial rules.
Furthermore, the Ministry of Fisheries must explain why it failed to appoint a substantive CEO for years. This inaction directly enabled the looting of taxpayers’ money. Without consequences for such negligence, other state corporations will continue down the same path.
Final Word
The Auditor General’s report has put Kenya Fishing Industries Corporation in the spotlight, exposing a web of corruption, incompetence, and disregard for the law. The rot at Kenya Fishing symbolizes a wider crisis in state corporations where public money is routinely squandered. Dissolution may close one chapter, but justice will only be served if those responsible are held to account.
