National Treasury Cabinet Secretary John Mbadi on Monday explained why individuals who steal money from the state’s coffers opt to invest abroad.
The CS made the revelation while speaking on the second day of the 52nd East African Revenue Authorities Commissioners General (EARACG) meeting in Nairobi, hosted by the Kenya Revenue Authority (KRA).
Mbadi echoed remarks made previously by former President Uhuru Kenyatta that the country loses Ksh2 billion daily to theft of public funds.
He, however, added that the bulk of this money leaves the country, depriving the state of crucial taxes and employment opportunities further crippling the economy. He blamed the culprits for the vice saying it is a burden that is passed to the taxpayers.
A graphic showing taxes and the Kenyan flag in the background.
Photo
Canva
“Some of us steal money here, we go to Tanzania and invest there because when we invest in Kenya it will be more visible,” he stated.
The CS also noted that the suspects engage in money laundering across the border to evade security agencies at the border points.
“You also bring money from Tanzania by road, then come and start constructing buildings around here. That is what people do,” he revealed, explaining the menace has cost the country billions of money in taxes.
“If we are stealing Ksh2 billion per day and scale down by half, we would be saving a billion Kenyan shillings which would accumulate to Ksh365 billion a year which is more than external borrowings.”
Mbadi reasoned that if properly managed, proceeds from corruption can be used for development as well as reduce external borrowings.
The assertion that Kenya loses Ksh2 billion daily highlights a critical need for reform in fiscal policy and governance practices in the management of public resources.
The revelation by the CS comes as the International Monetary Fund (IMF) revealed that it will be sending its officials to Kenya to audit corruption cases in the nation’s government before unlocking any more funds.
The Kenyan Government had requested the IMF to conduct an official review of the country’s corruption and governance issues. Prime cabinet secretary Musalia Mudavadi acknowledging the review, noted that the war on corruption has taken a long time and needs to be tackled head-on.
Treasury Principal Secretary Chris Kiptoo attending the IMF-World Bank annual meeting in Washington DC, the US on October 22, 2024
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Ministry of Treasury and Economic Planning
