Quarter of Kenya's state budget unaccounted for - auditor general - CNBC Africa

Quarter of Kenya's state budget unaccounted for - auditor general

East Africa

by Edith Honan 0

Kenyan shilling. Photo: Wikipedia

NAIROBI (Reuters) - About a quarter of Kenya's 1.6 trillion shilling ($16 billion) budget cannot be adequately accounted for, the country's auditor general said, days after U.S. President Barack Obama urged the country to do more to stop graft.

Commentators said the report by Auditor General Edward Ouko's office exposed the scale of official corruption in Kenya, east Africa's biggest economy, which investors often cite as a hurdle to doing business there.

In the report released late on Tuesday, the auditor general said 2014/15 spending worth 450 billion shillings was not properly accounted for, demonstrating "persistent and disturbing problems in collection and accounting for revenue".

"Corruption thrives in a big way in government offices, yet little is being done to arrest the situation," an editorial in the Daily Nation newspaper said. "We must end the culture of misuse of state resources. Those implicated must be seized and punished."

The report was released shortly after U.S. President Barack Obama called on Kenyans at the weekend to do more to end graft to help the economy grow faster.

"Here in Kenya, it's time to change habits, and decisively break that cycle, because corruption holds back every aspect of economic and civil life," said Obama, whose father was Kenyan.

Obama said the government had to show it was tackling corruption with prominent prosecutions, adding that it was an issue that also needed to be addressed elsewhere in Africa.

President Uhuru Kenyatta said the fight against graft was a priority when he took office in 2013, but critics complain that too little has been done.

Kenyatta promised in March to take personal charge of the battle against corruption and said that any official being investigated for graft must step aside.

One minister has been charged for abuse of office when he held a senior ministry post before joining the cabinet, while a second has been charged with obstructing an investigation.

Spending cited in the auditor's report included 113 billion shillings in "unconfirmed subscriptions" to international bodies, and an unexplained overpayment of 38 billion shillings by the Transport Ministry.

The figure did not include an audit of county spending, which was done separately.

"As reported under the respective revenue statements, the discrepancies are mainly due to unexplained and unreconciled differences between revenue statement balances and the exchequer records maintained by the National Treasury," the report said.

A spokesman for Kenyatta and the Transport ministry did not immediately respond to a request for comment.

Past Kenyan governments have made similar commitments to fight corruption, only to have the campaigns fizzle away.

($1 = 101.7000 Kenyan shillings)

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