Kenya’s Drought Cash Cow – Report by Africog

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Kenya’s corruption scandals are never ending. Just when the heat from one scandal is ending another one is tossed into the public arena. The issues of governance, misused funds or missing funds always seem to come up. Sometimes you wonder if there will ever be a time when there will be no scandals in Kenya.

Today I was reading the Africog report on the  World Bank-funded Arid Lands Resource Management Project. The World Bank gave money to Kenya to mitigate the effects of drought and it seems that 62% of the money was spent fraudulently or is in question.

Kenya's drought cash cow
Here is a snippet of the report from Africog – Africa Center for OPEN Governance.

The World Bank-funded Arid Lands Resource Management Project (ALRMP) was set up to help mitigate the effects of drought and poverty in arid and semi-arid areas. The project was funded continuously from 1996 until July 2010, when funding was frozen pending the outcome of a World Bank initiated forensic audit.

The World Bank’s Integrity Vice-Presidency (INT), its department responsible for investigating allegations of fraud and corruption in its projects, published its audit findings on July 15, 2011. Among the 28,000 transactions sampled over two financial years (FYs) from July 2006 to June 2008, for seven districts and the project headquarters, it found that an alarmingly high 62 percent of the expenditures were suspected fraudulent or questionable. The queried funds included Government of Kenya (GoK) counterpart funds, which made up approximately 14.5 percent of the total suspected fraudulent or questionable expenditures. In all, INT found Ksh. 511 million in expenditures (excluding payroll expenditure) that caused suspicion, of which Ksh. 76 million were GoK funds.

INT then collaborated with the Kenyan Internal Audit Department (IAD) on a joint review of INT’s audit to reach a final conclusion regarding how much of the World Bank’s share of the audited expenditures would be declared officially “ineligible”. According to all World Bank loan agreements, “ineligible” funds must be repaid to the World Bank. The joint INT/IAD report declared approximately 45 percent of the audited funds (Ksh. 340 million) ineligible. The INT/IAD report addressed only the World Bank funds, not the Ksh. 76 million in questionable GoK expenditures. If INT/IAD audit the remaining 21 districts, as promised, then the amounts queried are likely to increase significantly. Projecting the same rates of ineligible spending to all of the districts, the amount for the last two project years alone, could easily exceed Ksh. 1 billion in funds – money that the GoK would need to refund to the World Bank.

Phase Two of the Arid Lands Resource Management Project (ALRMP II) ran from 2003 to December 2010, having succeeded the original ALRMP, which ran from 1996 to 2003. Until the creation of the Ministry for the Development for Northern Kenya and Other Arid Lands in 2008, the project was under the Office of the President. ALRMP I was itself a successor project to the World Bank-funded Drought Recovery Project (EDRP), which had run from 1993 to 1997. By the end of ALRMP II, which was the subject of the INT audit, the project covered 28 districts, 11 of which were arid and 17 semi-arid. INT began their audit in April 2009, and based on its preliminary findings, suspended the project in July 2010.

The project was closed in December 2010, effectively ending plans to roll out the third phase,1 scheduled to provide another US$ 100 million in World Bank funds, and at least another US$ 45 million from other donors.

Find the copy of the report ALRMP_Report_final(1).

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