Kenyan looters can run but cannot hide

A military court in the Democratic Republic of Congo on Tuesday sentenced ex-President Joseph Kabila to death in absentia for "treason." [AFP]

In Kinshasa, a courtroom fell silent last Tuesday as former Congolese president Joseph Kabila was sentenced to death for embezzlement and money laundering.

The judgment, based on court papers detailing how billions vanished through shell companies and family networks that fed off State coffers, sent shockwaves far and beyond the borders of the  Democratic Republic of Congo.

Over eight hundred kilometers south, in Angola, the children of former President José Eduardo dos Santos, who died in exile in 2022, are entangled in corruption cases after the “Luanda Leaks” revealed how public oil wealth had been siphoned into private empires. 

For many Kenyans, the downfall of these once-untouchable politicians introduces a matter that remains in their imagination because of the country’s long trail of financial scandals. The rising public debt continues to feed private fortunes, and political power has become a gateway to plunder. With Kabila and dos Santos mighty fall, a quiet fear now lingers in Nairobi’s corridors of power that the country may be edging toward its own day of reckoning. 

From Goldenberg to Anglo Leasing

The architecture of Kenya’s financial capture is not new; it has been methodically refined over decades. The pattern first crystallized in the 1990s through the Goldenberg scandal, which the Bosire Commission of Inquiry later described as “a calculated fraud of monumental proportions.

”The scheme, built on falsified gold and diamond export compensation, sanctioned at the highest levels, siphoned an estimated Sh158 billion (about 10 per cent of Kenya’s GDP then) from public coffers. It triggered a currency collapse and set the economy back by years. At its core was businessman Kamlesh Pattni, who exploited a legitimate export incentive to create a paper empire of profit. 

A decade later, the Anglo Leasing affair followed the same design, only more sophisticated. Eighteen security-related contracts worth over Sh50 billion were awarded to phantom firms with no operational existence. British investigators and Kenya’s parliamentary committees later established that the companies were registered offshore, with payments routed through accounts in Switzerland and the United Kingdom. Anglo Leasing institutionalized what Goldenberg had pioneered: a system where public procurement became the principal tool for political financing and elite enrichment. 

Fast-forward to 2021, when the Pandora Papers exposed offshore companies secretly controlled by the Kenyatta family, holding assets worth millions of dollars. Unlike Goldenberg or Anglo Leasing, this was not a direct raid on the treasury. It was the outcome of a system long normalized, where political power enables private capital flight under the protection of opaque financial jurisdictions. In essence, the leaks confirmed what earlier scandals had built: the transformation of state power into a conduit for private accumulation.

This model mirrors the systems perfected by Kenya’s counterparts. In Angola, the International Consortium of Investigative Journalists (ICIJ) found that “a constellation of European consulting firms, banks and lawyers helped the Angolan president’s daughter [Isabel dos Santos] build a business empire… and channel millions of dollars in public funds into her own pockets.”

In the DRC, the watchdog group The Sentry documented how “The Kabila family has taken advantage of the weak regulatory environment in the DRC’s burgeoning mineral sector to build a network of businesses that could allow them to profit from the country’s mineral wealth far beyond President Kabila’s tenure.”

The late former Angola President Jose Eduardo dos Santos. His children are entangled in corruption cases after the “Luanda Leaks” revealed how public oil wealth had been siphoned into private empires.  [Agencies]

So when Kabila’s guilty verdict landed, it echoed far beyond Kinshasa. “Justice rendered in the name of the Congolese people gives satisfaction to its people,” declared prosecutor Richard Bondo. His words carried a warning across the continent and Nairobi’s power circles: when power becomes a private enterprise, the eventual opening of the books is often inevitable and the masks fall.

Mega-projects, phantom billions

Kenya’s modern era of state capture is distinguished by its scale and its intimate link to public debt. The country’s public debt crisis has become the central pillar of its political economy. Loans once sold as development fuel are now feeding a machine of patronage and opacity. Between 2013 and 2023, the national debt ballooned from Sh1.9 trillion to over Sh10.1 trillion.

An analysis of national accounts reveals a haunting discrepancy: while the Kenya Revenue Authority collected Sh13.4 trillion in revenue against a government expenditure of Sh14.7 trillion (a shortfall of Sh1.3 trillion), the state borrowed Sh7.2 trillion in the same period. This arithmetic forces a critical question: so where did the extra trillions go?

Economist David Ndii, long before joining President William Ruto’s administration, called it “a classic case of debt capture.” Kenya, he warned, was “borrowing not to build, but to feed patronage networks.” Ironically, Ndii now advises a government accused of deepening the very system he once condemned.

Today, more than 60 per cent of state revenue is swallowed by debt repayment, leaving crumbs for health, education, and jobs. “Once a state becomes addicted to borrowing for theft,” Ndii once wrote, “it cannot reform without crisis.”

If debt is the country’s new addiction, then the question is not how it began but where the money goes. The trail points to a string of mega-projects, railways, dams, highways, and hospitals, each unveiled as progress but financed like plunder. Behind their glossy launches lie opaque loans, inflated contracts, and offshore payments that continue to turn development into debt.

The Eurobond Mystery: In 2014, Kenya raised US $2 billion (Sh263 billion) in its debut Eurobond issue. Yet, by 2016, then-Auditor-General Edward Ouko reported he could not trace the money in government accounts. To this day, no comprehensive public account has been provided for one of the largest foreign financing inflows in Kenyan history, leaving taxpayers to repay a loan with unclear benefits.

National Youth Service (NYS) Scandal: In 2015 and again in 2018, the NYS scandals exposed the depth of Kenya’s entrenched graft networks. In the first cycle, about Sh791 million disappeared through fictitious supplies and fraudulent payments; three years later, a second wave drained nearly Sh9 billion. The NYS, once billed as a youth empowerment initiative, became a cash cow for politically connected cartels, a microcosm of how public programmes are routinely hijacked to serve private interests.

The Arror and Kimwarer dam projects in Elgeyo-Marakwet were sold as transformative ventures. Valued at Sh 63 billion (US$490 million), they were financed through foreign loans but never materialized. In 2019, then-Treasury Cabinet Secretary Henry Rotich was charged with corruption. Prosecutors noted in court that, “the Kenyan public is servicing loans for projects that remain phantom.”

In 2020, President Uhuru Kenyatta declared the Kimwarer dam “technically and financially unviable” and canceled it, yet billions had already been disbursed. Kenyans now service loans for dams that exist only on paper.

The Standard Gauge Railway (SGR): A gleaming symbol of progress officially priced at US$5 billion (Sh657.5 billion), the SGR became Kenya’s most expensive infrastructure project in history, yet its cost far exceeded regional benchmarks. Comparable rail lines built in Ethiopia and Tanzania cost nearly half as much per kilometre. Court filings in 2020 later revealed secretive “take or pay” clauses that forced the Kenya Ports Authority to guarantee cargo volumes for repayment, regardless of usage. In 2020, a High Court ruling declared that the secrecy surrounding the financing agreements violated constitutional principles of accountability.

Auditor General Ouko later warned that corruption in Kenya had evolved from isolated scandals into a “budgeted enterprise.” His audits exposed systemic diversion built into the national budget, projects inflated or designed purely to justify borrowing. In report after report, Ouko flagged “unsupported expenditures,” “ghost payments”and“irregular procurement” worth hundreds of billions of shillings, many linked to large infrastructure schemes like the SGR.

Despite the sleek locomotives, the railway bleeds losses each year, locking taxpayers into decades of repayments for a project that may never break even.

New frontiers of fiscal capture

The methods of extraction have evolved, seeping into essential public services and hiding behind digital platforms. The rot runs deep in the health sector. In 2024, Auditor-General Nancy Gathungu flagged Sh104.8 billion in irregular procurement under the new Social Health Authority (SHA) system, the successor to NHIF. Her report warned that Kenya risked being “locked into a long-term digital infrastructure whose costs and ownership remain opaque.”

The findings echoed the familiar patterns of systemic looting seen at NHIF, to the Afya House scandals and even earlier at KEMSA, where Sh7.8 billion vanished through inflated Covid-19 tenders. What was designed as a national safety net has instead mutated into a rent-seeking pipeline, Kenya’s own version of Angola’s Sonangol, where oil profits once disappeared into elite coffers while public hospitals crumbled.

The Housing Levy: President Ruto’s flagship housing programme follows the same arc. Introduced under the Finance Act 2023, it deducts 1.5 per cent from every worker’s gross pay, matched by an equal employer contribution. Though the high court initially struck it down as unconstitutional, Parliament later reintroduced it under a fresh legal veneer, and the courts allowed it to proceed. Critics see in it less a housing revolution than a political enterprise, a compulsory levy disguised as social uplift, feeding opaque contracts and campaign networks ahead of 2027. Ruto has already signed MoUs reserving 20 per cent of the units for teachers and pledged similar allocations to police and other loyal constituencies.

What was framed as an affordable housing dream now mirrors a familiar pattern: public sacrifice underwriting private enrichment. Critics argue it risks becoming a multibillion-shilling sinkhole, a public-private venture where citizens bear the cost while politically connected developers reap the gains. Like Kabila’s mining schemes and dos Santos’s oil empire, Ruto’s housing plan smells like the modern face of state capture, a populist project masking the quiet consolidation of political power and personal wealth.

Education: the country’s education sector has become the latest casualty of fiscal capture. An audit by Justus Okumu revealed that over Sh3.7 billion was paid to ghost students and non-existent schools through inflated enrolment data on NEMIS between 2020/21 and 2023/24. Of 83 sampled schools, 14 institutions that do not exist received Sh16.6 billion, while six defunct ones were still allocated Sh889,348. The audit further exposed a Sh117 billion funding shortfall across real schools, Sh71 billion in secondary, Sh32 billion in junior secondary, and Sh14 billion in primary education. The findings mirror a now-familiar pattern: a state that budgets for theft, not learning, where digital systems meant to enhance transparency, like NEMIS, have instead become conduits for siphoning public funds.

eCitizen heist: Just as Angola’s Sonangol and Congo’s Gécamines became shadow states within states, conduits for elite enrichment under dos Santos and Kabila, Kenya’s eCitizen appears to be evolving into a digital version of the same playbook. What began as a reform to streamline public payments has turned into a parallel treasury. The Auditor General’s 2023/24 report revealed that of the Sh100.84 billion collected through the platform, nearly Sh44.8 billion could not be accounted for.

Another Sh7.05 billion sat in accounts without formal service agreements, while Sh2.57 billion in receipts had no matching invoices. What should have been a clean pipeline of public revenue has instead become a network of opaque transactions and private maintenance fees. The centralization of state payments under a single, unaccountable platform mirrors how oil and mineral revenues were ring-fenced by presidential networks in Luanda and Kinshasa. In all three cases, the language of modernization concealed a deeper project, the quiet privatization of the state’s fiscal heart.

Shrinking civic space

This fiscal capture has profound political consequences. Each borrowing cycle births new cartels, new tender kings, and new loyalties that tether politics to procurement. Parliament, once a fiscal watchdog, has become a theatre of endorsement, passing loan guarantees it scarcely understands. The Judiciary, starved of funds, turns cautious when probing power. In this ecosystem, debt is not merely an economic burden but a political weapon, a currency of control that keeps officials obedient, critics subdued, and the cycle of plunder uninterrupted

This erosion of accountability has been accompanied by a constriction of democratic space. The country’s civic space remains legally open but politically fragile. Activists, journalists, and civil society organizations tracing corruption report increased surveillance, arbitrary arrests, and smear campaigns. Many media houses, dependent on government advertising, have become cautious observers rather than watchdogs.

The fates of Kabila and dos Santos offer a stark lesson. Both leaders ruled nations brimming with natural resources but gouged by corruption, leaving behind fiscal ruins and disillusioned citizens. When their regimes ended, the illusion of invincibility shattered.

Kenya’s own pattern, from Goldenberg and Anglo-Leasing to the unaccounted Eurobond, the phantom dams, the debt-laden railway, and the digitized opacity in health and eCitizen suggests it is traveling a similar road.

The scale of alleged diversion in Kenya may differ, but the anatomy is identical: public credit is captured, and money meant for citizens is converted into private wealth.

As senior Treasury official, speaking on condition of anonymity, summarized the mechanism bluntly: “These deals are designed to fail on paper so they can succeed in theft. The debt is real, the project is imaginary.”

The verdict from Kinshasa and the ongoing probes in Luanda show that impunity is not perpetual. The math of Kenya’s debt and the ledger of its scandals already sketch the outline of a hollowed state.

As the Congolese prosecutor’s words echoed last Tuesday, that justice for the people brings them satisfaction; Nairobi may soon find its own balance sheet demanding a similar, long-overdue day of accountability. The only remaining variable is time.