By: Midmark Onsongo
Worth Noting:
- At the heart of the Eurobond scandal was the Jubilee government, led by President Uhuru Kenyatta and his Deputy, William Ruto. The National Treasury, under Cabinet Secretary Henry Rotich, was responsible for managing the funds.
- The first signs of trouble emerged when opposition leaders, particularly Raila Odinga, began raising concerns about the whereabouts of the Eurobond money. According to the government, the funds were channeled into the Consolidated Fund and used for various development projects. However, Odinga and other critics argued that the money was missing, questioning the transparency of the process.
- Despite numerous investigations, including one by the Auditor General, Edward Ouko, the exact whereabouts of the missing Eurobond money remain a mystery.
The Eurobond and Anglo-Leasing scandals are among the most infamous in Kenya’s history, emblematic of deep-seated corruption that has plagued the nation for decades. These financial malpractices, involving billions of Kenyan Shillings, not only highlighted the vulnerability of Kenya’s financial systems but also exposed the intricate web of deceit that connects politicians, companies, and countries in a dance of corruption.
The Eurobond Scandal: A Mirage of Development
In June 2014, the Kenyan government made history by successfully issuing its first-ever Eurobond. Worth a staggering $2 billion, or roughly KES 200 billion, the bond was hailed as a significant achievement, symbolizing Kenya’s entry into the global financial market. The money was intended to fund various infrastructure projects, which were expected to spur economic growth and improve the lives of ordinary Kenyans. However, what began as a promising venture quickly descended into a quagmire of suspicion and scandal.
The Cast of Characters
At the heart of the Eurobond scandal was the Jubilee government, led by President Uhuru Kenyatta and his Deputy, William Ruto. The National Treasury, under Cabinet Secretary Henry Rotich, was responsible for managing the funds. Other key players included the Central Bank of Kenya (CBK), led by then-Governor Prof. Njuguna Ndung’u, and several top government officials who were supposed to oversee the disbursement and utilization of the funds.
The Plot Unravels
The first signs of trouble emerged when opposition leaders, particularly Raila Odinga, began raising concerns about the whereabouts of the Eurobond money. According to the government, the funds were channeled into the Consolidated Fund and used for various development projects. However, Odinga and other critics argued that the money was missing, questioning the transparency of the process.
As the drama unfolded, it became clear that a significant portion of the Eurobond funds could not be accounted for. Reports suggested that up to $1 billion (approximately KES 100 billion) was untraceable. The government’s explanation of how the funds were spent was riddled with inconsistencies, further fueling suspicions of corruption.
International firms such as J.P. Morgan and Citibank, which acted as lead managers for the Eurobond issuance, were also thrust into the spotlight. These global financial giants had vouched for the bond’s credibility, making the scandal a matter of international concern. The trail even led to institutions in London, where the bond had been issued, raising questions about the involvement of foreign banks and whether they had turned a blind eye to the shady dealings.
The Aftermath
Despite numerous investigations, including one by the Auditor General, Edward Ouko, the exact whereabouts of the missing Eurobond money remain a mystery. The scandal underscored the lack of accountability in Kenya’s financial management and raised concerns about the country’s debt sustainability. For ordinary Kenyans, the Eurobond scandal was a bitter reminder that grand promises of development often mask the reality of elite corruption.
The Anglo-Leasing Scandal: A Masterclass in Corruption
If the Eurobond scandal was a mystery, the Anglo-Leasing scandal was a masterclass in corruption. This scandal dates back to the early 2000s during President Mwai Kibaki’s administration, though its roots can be traced to the previous regime under President Daniel arap Moi.
The Scheme
The Anglo-Leasing scandal involved a series of fraudulent contracts between the Kenyan government and several phantom companies. These contracts, valued at billions of Kenyan Shillings, were for the supply of security and communication equipment that was either overpriced or never delivered. The most infamous of these contracts was the one awarded to a shadowy company named Anglo-Leasing Finance Company, which was supposed to supply a passport printing system at an exorbitant cost.
Other companies involved in the scandal included Infotalent Limited, which was contracted to supply forensic laboratories, and Sound Day Corporation, which was to provide a secure communication system for the police. None of these companies had a credible track record, and some were later discovered to be non-existent.
The Puppeteers
The Anglo-Leasing scandal implicated some of the most powerful figures in Kenya’s political landscape. Among them was David Mwiraria, who served as Finance Minister under Kibaki, and Chris Murungaru, the then Minister for National Security. The scandal also ensnared senior officials within the Office of the President, including then-Head of Public Service, Francis Muthaura, and former Vice President, George Saitoti.
Interestingly, the Anglo-Leasing contracts had been signed during Moi’s presidency, but the payments continued under Kibaki, leading to speculation that both regimes had been complicit. The Swiss-born businessman Deepak Kamani, along with his family, emerged as central figures in the scandal, allegedly orchestrating the deals and acting as conduits for the illicit payments.
International Connections
The Anglo-Leasing scandal was not just a Kenyan affair. The money trail led investigators across the globe, from banks in the United Kingdom and Switzerland to offshore accounts in tax havens like the British Virgin Islands. These international connections highlighted the global nature of financial crimes and the challenges in holding the perpetrators accountable.
The scandal also put Kenya’s relationship with its development partners under strain. The United Kingdom, which had been one of Kenya’s key allies, was particularly vocal in demanding accountability. The British government even froze aid to Kenya at one point, citing concerns over corruption.
The Fallout
The Anglo-Leasing scandal had far-reaching consequences for Kenya. It tainted the Kibaki administration’s legacy, which had otherwise been marked by economic recovery and infrastructure development. The scandal also sparked widespread public outrage and led to the resignation of several top government officials, including David Mwiraria.
Despite numerous investigations and court cases, justice remains elusive. In 2015, a Kenyan court acquitted Deepak Kamani and his co-accused, citing lack of evidence. This decision was met with disbelief and frustration, as many Kenyans felt that the rich and powerful had once again escaped accountability.
The Eurobond and Anglo-Leasing scandals are two sides of the same coin. Both represent a betrayal of the Kenyan people by their leaders, who were entrusted with the stewardship of public resources. These scandals have left a legacy of mistrust, where citizens question the sincerity of every government promise. They serve as stark reminders of the need for vigilance, transparency, and accountability in the management of public funds. Until these principles are upheld, Kenya risks remaining trapped in a cycle of corruption, where scandals are the norm, and justice is an exception.
This article was scripted by;
MIDMARK ONSONGO
(Sustainable economist, Geo-Politics strategizer)
