For years, Kenyans have unknowingly paid billions to the government through illegal fees disguised as convenience charges.
A new audit by Auditor General Nancy Gathungu has uncovered a massive financial irregularity in the eCitizen payment system, revealing that over Ksh 2.1 billion was collected unlawfully.
This money, deducted in Ksh50 charges every time a Kenyan accessed a public service, was not backed by law. Worse, some of it ended up in private accounts, bypassing official government channels altogether.
The revelations raise deep concerns about transparency, oversight, and accountability in Kenya’s digital governance.
eCitizen Irregularities Revealed in Special Audit Report
The Special Report on eCitizen, published in March, has blown the lid off a financial scandal involving the illegal collection of billions through the government’s digital platform. According to the report, the National Treasury imposed a flat Ksh50 “convenience fee” on every transaction processed through eCitizen, completely disregarding a 2014 Gazette directive.
Gazette Notice No. 9290/2014 required a nominal administrative fee to be charged per transaction, based on a prorated percentage of the amount paid. But the Treasury ignored this requirement for nearly a decade, charging Kenyans a fixed Ksh50 or USD1 per transaction instead.
From the launch of eCitizen in 2017 to January 23, 2023, more than Ksh1.8 billion and USD3.3 million were collected irregularly. The Auditor General termed these collections unlawful and a clear violation of government directives.
The irregularities did not stop there. After December 14, 2023, two collection gateways were in use—one for agencies onboarded before President William Ruto’s directive to unify payment systems, and another for those added later. Both systems continued charging the illegal Ksh50 flat rate. Between December 14, 2023, and June 30, 2024, Ksh30.7 million was collected through the first gateway and Ksh319 million through the second.
In total, the Auditor General confirmed that more than Ksh2.1 billion was unlawfully taken from Kenyans in direct contradiction to gazetted instructions.
Funds Diverted to Private Accounts
Beyond the illegal fees, the audit exposed an even more alarming issue—the diversion of public funds to private accounts.
The report flagged four transactions made on January 25, 2024, where money from the official Paybill number 222222, designated for government service payments, was sent to private entities. These transactions totaled Ksh127 million and were traced through bank statements.
eCitizen is designed so that all collected funds are automatically transferred to a settlement account at a commercial bank. Any deviation from this process is illegal. The fact that nearly an eighth of a billion shillings was rerouted to private entities raises serious red flags about corruption and misuse of public systems.
There was no explanation in the report about who authorized these transfers, nor the identities of the private recipients. The Auditor General has recommended further investigations and possible prosecution of those involved.
Phantom Payments to Non-Contracted Firms
The audit also revealed that Ksh492 million was paid to a company that was not part of any official agreement for system upgrades.
The unnamed company received payments for services allegedly rendered to improve the eCitizen platform. However, the Auditor General’s report makes it clear that this firm had no formal contract or legal mandate to receive such funds.
This raises critical questions. Who approved these payments? What services were delivered — if any? And why was a company without an agreement paid nearly half a billion shillings from public funds?
This points to a larger systemic failure in procurement and contract management within the digital payments space. It also suggests possible collusion or negligence by officials tasked with safeguarding public money.
Kenyans Deserve Transparency and Justice
The eCitizen scandal is not just about billions lost. It’s about trust. Millions of Kenyans use the platform every day to access essential services like passport applications, driving licenses, and business permits. Each time they paid the Ksh50 fee, they believed it was legitimate.
Instead, the Auditor General’s report shows that they were overcharged illegally—and that part of their money may have lined private pockets.
The government must now act swiftly. There must be full disclosure of all individuals and companies involved. Legal action should follow against any official who approved or benefited from these irregularities.
Moreover, a complete overhaul of the eCitizen payment system is needed. This includes the immediate suspension of the Ksh50 charge, a refund mechanism for overcharged users, and strict audits going forward.
