Financial Crime World

Financial Crimes on the Rise in Kenya: A Look at Unwanted Wealth, Corruption Cases, and Legal Frameworks

Kenya’s Economic Instability: Financial Crimes and Their Impact

  • Kenya grapples with a high rate of financial crimes such as Tax Fraud, Procurement Fraud, Money Laundering, Cyber Crime, Bribery and Corruption, Asset Misappropriation, and Accounting and Financial Statement Fraud (XpressMoney.com, 2021).
  • Over 4,700 economic crimes were reported to the police in 2019 (XpressMoney.com, 2021).
  • 58% of survey respondents reported experiencing some form of economic crime within the last 24 months – a decrease from 75% reported in 2018 (Transparency International, 2021).
  • Kenya ranked 124th out of 180 countries for corruption in the Corruption Perception Index 2020 (Transparency International, 2021).
  • Kenya’s legal and institutional framework against economic crimes includes:
    • Ethics and Anti-Corruption Commission Act, 2011 (EACCA)
    • Ethics and Anti-Corruption Commission (EACC)
    • Kenya Anti-Corruption Commission (KACC)
    • Anti-Corruption Police Unit
    • Central Bank of Kenya Act
    • Ministry of Justice and Constitutional Affairs
    • National Anti-Corruption Campaign Steering Committee
    • Privatisation Act, 2005
    • Public Audit Act, 2003
    • Government Financial Management Act, 2004
    • Public Procurement and Disposal Act, 2005
    • Office of the Director of Public Prosecution
  • Unexplained Assets Recovery proceedings require those suspected of acquiring wealth through illicit means to prove the lawful origin of their assets (Jomo Kenyatta, 2020).
  • Section 55 of the Anti-Corruption and Economics Crimes Act, which creates a presumption of corruption, is frequently challenged in court due to allegations of violation of the right to a fair trial and presumption of innocence (Jomo Kenyatta, 2020).
  • Effective targeting of stolen assets using civil unexplained wealth legislation:
    • In EACC vs. Patrick Ochieno Abachi & Ors, the Ethics and Anti-Corruption Commission challenged the respondent to explain the source of his fortune, resulting in the forfeiture of several bank accounts, properties, and plots of land (XpressMoney.com, 2021).

Prominent Corruption Scandals in Kenya

  • Significant financial corruption scandals include:
    • The Goldenberg Scandal: A political scandal involving the highest levels of the Kenyan government during the 1990s, resulting in an estimated loss of over 10% of the country’s GDP (XpressMoney.com, 2021).
    • Daniel Arap Moi’s regime allegedly subsidized gold exports by paying Goldenberg International above their foreign currency earning.
    • Nairobi’s County Chief Officer Finance, Jimmy Kiamba, was ordered to pay KES 31 Million to the High Court after failing to provide sufficient explanations for his wealth (XpressMoney.com, 2021).
    • Three governors and a sitting County Boss were linked to Sh 11 Billion in unexplained wealth (The Nation, 2021).

Conclusion

  • Kenya’s struggle against financial crimes continues, with numerous ongoing cases and litigations.
  • Swift resolutions are expected as judges, prosecutors, and the Anti-Corruption and Economic Crimes Commission adapt to the law.
  • The growing expertise of investigators in uncovering evidence of civil illicit enrichment strengthens Kenya’s efforts to combat corruption.