By: Midmark Onsongo
Worth Noting:
- Fast forward to the Anglo Leasing scandal, which emerged in the early 2000s. The government contracted a phantom company to supply secure passport equipment and other services at grossly inflated prices.
- The scandal is believed to have cost the Kenyan taxpayer KES 70 billion (around USD 650 million). Despite widespread public outrage, the masterminds behind the scam were never held accountable. The funds that were siphoned off could have been used to create jobs, improve public services, or reduce the national debt. Instead, they were stolen, further impoverishing the nation.
- The National Youth Service (NYS) scandal is another glaring example of how the rich steal while the economy bleeds.
Kenya’s economic landscape is often depicted as a battlefield, where the power struggle between the rich and the poor plays out in the open. The notion that “the economy only suffers when poor people protest, not when the rich steal” underscores the stark inequality and injustice that has characterized the nation for decades. This observation is not just a statement of frustration but a reflection of the systemic issues that continue to plague Kenya’s socio-economic fabric. The truth is, Kenya’s economy suffers not because of the protests of the poor but because of the rampant corruption and theft by those in positions of power—scandals that have drained the country’s resources and left millions of Kenyans in poverty.
One of the most significant scandals in Kenya’s history is the Goldenberg scandal, which came to light in the early 1990s. The scheme, orchestrated by the Kenyan government, involved paying out 35% more in export compensation to a company called Goldenberg International for fictitious gold and diamond exports. The scandal is estimated to have cost Kenya over KES 158 billion (approximately USD 2.6 billion), a colossal sum that could have been used to develop infrastructure, improve healthcare, or fund education. Instead, this money lined the pockets of a few individuals, while the majority of Kenyans continued to live in abject poverty.
Fast forward to the Anglo Leasing scandal, which emerged in the early 2000s. The government contracted a phantom company to supply secure passport equipment and other services at grossly inflated prices. The scandal is believed to have cost the Kenyan taxpayer KES 70 billion (around USD 650 million). Despite widespread public outrage, the masterminds behind the scam were never held accountable. The funds that were siphoned off could have been used to create jobs, improve public services, or reduce the national debt. Instead, they were stolen, further impoverishing the nation.
The National Youth Service (NYS) scandal is another glaring example of how the rich steal while the economy bleeds. The NYS, a government program meant to empower youth through job creation, became a cash cow for corrupt officials and business people. In 2015, it was revealed that KES 791 million had been stolen through fraudulent procurement deals. A few years later, another KES 10 billion was found to have been looted from the same institution. These funds could have empowered thousands of young Kenyans, reducing unemployment and boosting the economy. Instead, they were siphoned off by a few individuals who continue to live in luxury while the youth they were supposed to help languish in poverty.
Another scandal that shook the nation was the Arror and Kimwarer dams scandal, where KES 21 billion meant for the construction of two dams in Elgeyo-Marakwet County vanished into thin air. The money was paid to a bankrupt Italian company, CMC di Ravenna, for work that was never done. The project was supposed to provide water for irrigation, generate electricity, and create jobs for thousands of Kenyans. Instead, the funds were stolen, leaving the communities that were supposed to benefit from the dams in despair. The theft of these funds is not just a financial loss but a betrayal of the people who trusted the government to deliver on its promises.
The Kenya Medical Supplies Authority (KEMSA) scandal, which came to light during the COVID-19 pandemic, is yet another example of how the rich exploit crises for personal gain. KES 7.8 billion meant for the procurement of medical supplies to fight the pandemic was looted through inflated prices and fraudulent tenders. This scandal occurred at a time when Kenya was grappling with the devastating effects of the pandemic, with hospitals overwhelmed and healthcare workers risking their lives to save others. The stolen funds could have been used to buy personal protective equipment (PPE), ventilators, and other critical supplies, but instead, they ended up in the pockets of a few individuals. The KEMSA scandal not only exposed the greed of those in power but also highlighted the deep-rooted corruption that continues to undermine Kenya’s healthcare system.
In the backdrop of these grand heists is the persistent impunity enjoyed by the elite. Despite numerous investigations and public outcry, the masterminds behind these scandals rarely face justice. The judicial system, which is supposed to be the last line of defense for the common man, has often been compromised or rendered ineffective by those with deep pockets. This lack of accountability has only emboldened more individuals to engage in corruption, knowing that the consequences are minimal.
The impact of these scandals on Kenya’s economy cannot be overstated. Corruption has led to the misallocation of resources, stunted economic growth, and deepened inequality. The funds that are stolen could have been used to improve public services, create jobs, and lift millions of Kenyans out of poverty. Instead, they are used to fund lavish lifestyles for a select few, while the majority of Kenyans struggle to make ends meet.
The economy suffers not because of the protests of the poor, but because of the theft by the rich. When the poor protest, they are often met with violence and repression. The government deploys security forces to quell demonstrations, sometimes resulting in loss of life. These protests, however, are not the cause of Kenya’s economic woes; they are a symptom of the underlying issues that have plagued the country for decades. The protests are a cry for justice, for accountability, and for a fair distribution of resources. They are a response to the systemic corruption that has left millions of Kenyans in poverty.
In contrast, when the rich steal, there is no immediate visible impact on the economy. The stock market does not crash, the currency does not devalue, and the economy does not come to a halt. However, the long-term effects are devastating. The theft of public funds leads to underdevelopment, increased public debt, and a lack of trust in public institutions. It creates a vicious cycle where the rich get richer, and the poor get poorer. The economy suffers in silence, as essential services are underfunded, infrastructure projects are abandoned, and opportunities for economic growth are lost.
The solution to Kenya’s economic woes lies not in suppressing the protests of the poor but in addressing the root causes of corruption and inequality. There must be a concerted effort to hold those who steal public funds accountable, regardless of their status or connections. The judicial system must be strengthened to ensure that justice is served, and the culture of impunity is eradicated. Public resources must be managed transparently and equitably, with a focus on improving the lives of all Kenyans, not just a select few.
Furthermore, there must be a shift in mindset among the Kenyan leadership. The economy cannot thrive if the rich continue to steal with impunity while the poor are left to bear the brunt of economic hardships. There must be a genuine commitment to economic justice, where wealth is distributed fairly, and opportunities are available to all. The government must prioritize the needs of the people over the interests of the elite, ensuring that public resources are used for the benefit of all Kenyans.
Kenya’s economy does not suffer because of the protests of the poor but because of the theft by the rich. The numerous scandals that have rocked the nation over the years have drained the country’s resources, stunted economic growth, and deepened inequality. The solution lies in addressing the root causes of corruption, holding those responsible accountable, and ensuring that public resources are managed transparently and equitably. Only then can Kenya’s economy truly thrive and provide a better future for all its citizens.
This article was scripted by;
MIDMARK ONSONGO
(Sustainable economist, Geo-Politics strategizer)
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