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Dam scandal brings down Kenya’s finance minister

Dam scandal brings down Kenya’s finance minister

In the highest-profile corruption case in recent history, Kenya’s finance minister has been arrested on charges relating to a contract with Italian construction firm CMC Di Ravenna to build two dams in the country’s western Elgeyo-Marakwet county.

Henry Rotich, along with the treasury’s permanent secretary Kamau Thugge, were among 28 officials who spent the night in police custody before pleading not guilty to 24 charges of abuse of office, conspiracy to defraud and engaging in a project without planning.

Leading the investigation, the director of public prosecutions Noordin Haji has accused the individuals of fraudulently inflating the cost of the two dams.

“If the projects were carried out in adherence to the law and existing policies for safeguarding the public interest, then it should not have cost $608m,” he says.

“We have evidence to prove that $155m was lost through a well-choreographed scheme to defraud public funds.”

Prosecutors say $106m was issued in advance payments which was shared out between conspirators and their agents.

They also allege that work on the two dams has not yet started, a claim which the directors of the Italian firm who are facing extradition to Kenya deny.

The ongoing investigation is a major step in the country’s fight against corruption, says John Githongo who acted as the permanent secretary for governance and ethics during former president Mwai Kibaki’s first term in office.

“The ministry of finance and office of the president have traditionally been the fulcrum of graft in Kenya so for the minister and permanent secretary of finance to both be arrested while in office is a first,” he tells African Business in Nairobi.

“Others have been charged before but only after they left office.”

Kenya is one of the most corrupt countries in the world according to Transparency International’s 2018 Corruption Perceptions Index which ranks the East African country level with Mauritania and Nigeria, scoring 144 out of 180.

The case will help silence president Uhuru Kenyatta’s critics who claim that his promises to clamp down on graft have not been met.

Independent political analyst Aly-Kahn Satchu says the “clumsy” nature of the scam was too much for the president to ignore.

“These guys weren’t the smartest on the track and it became impossible to avoid,” he says.

“The evidence trail which led Haji to this point was pretty clear and this ultimately posed the question to Kenyatta: are you serious about corruption or not?”

Some have argued that the investigation is a move against Kenyatta’s deputy president William Ruto who like Rotich belongs to the Kalenjin ethnic group and is gearing up to contest the president’s camp in 2022 elections.

After a large cash payment, the finance minister and his permanent secretary have been released on bail and are barred from returning to office or leaving the country while the investigation continues.

The arrest is expected to prompt either voluntary resignations or a cabinet reshuffle.

Kwadwo Sarkodie, partner at global law firm Mayer Brown, believes the charges may be dropped before the case is allowed to continue to prosecution.

“I wouldn’t be surprised if some sort of resolution whereby the charges were dropped or resolved before it turns into a full corruption trial,” he says.

“It’s a very lengthy process and there is a lot that could happen between this, the very initial stage, and the final conclusion.”

Kenyatta appointed the current minister of labour, Ukur Yatani, to run the treasury as acting finance minister on Wednesday. 

 

 

 

 

 

 

 

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