Cabinet Secretary John Mbadi stated that reducing corruption by 50 percent could enable the country to generate at least Sh365 billion in revenue, reducing the need for external borrowing. In line with this goal, the government has allocated Sh560 million to complete the digitization of its procurement system, which is expected to launch within this fiscal year.
Mbadi made these remarks during the State of Economy address at the National Treasury on Wednesday. His comments follow a recent report by Emerald Insight, which reveals that 70 percent of corruption cases involve procurement fraud, mainly in government departments. This finding highlights the critical need to address the link between procurement practices and corruption.
He noted that an e-procurement system would save substantial public funds and reassure taxpayers that they are getting good value for money. With procurement representing around 50 percent of the government’s annual budget, the National Treasury’s modernization efforts— including e-procurement and a Treasury Single Account for all payments—align with the 2012 Public Financial Management Act and aim to enhance financial transparency.
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The Treasury also plans to implement a virtual system for processing public tenders, integrated with the Kenya Revenue Authority to promote transparency and address tax evasion. “With this system in place, we won’t need to rely on international loans to cover budget deficits. Instead, we’ll use Public-Private Partnerships for major infrastructure projects,” Mbadi said.
Kenya currently ranks 126 out of 180 countries on the 2023 Transparency International Global Corruption Index, down from 123 in 2022. The Ethics and Anti-Corruption Commission estimates that corruption costs Kenya about Sh608 billion, or 7.8 percent of its GDP, each year.
