Billions Lost in Counties as Procurement Cartels Bleed Devolution Dry

A nationwide web of procurement fraud is threatening the very soul of Kenya’s devolution project, with shocking revelations showing how county officials are siphoning off billions through ghost companies and insider tendering schemes.

According to a report by Kenya’s Financial Reporting Centre (FRC), unscrupulous county officials have been orchestrating the diversion of public contracts to shell firms and proxy entities in elaborate corruption networks. These cartels are draining the country of an estimated Sh200 billion annually, funds meant to uplift grassroots development and service delivery.

Investigations have uncovered more than 130 suspicious transactions, many involving rapid cash withdrawals and questionable transfers from county accounts to businesses secretly owned by procurement officers, tender committee members, or their close relatives. In a damning trend, officials are reportedly registering companies on the same day, bypassing regulatory checks, and quickly awarding themselves lucrative contracts, often before the ink is dry.

In one county, Sh361.86 million was funneled to fifteen such companies within a 17-month period for cleaning, construction, and fumigation services, most of which were never delivered. Elsewhere, two politically connected individuals allegedly used five related firms to embezzle Sh1.1 billion between 2019 and 2023, using doctored purchase orders and duplicating service claims before draining the funds in small cash withdrawals.

Despite these revelations, efforts to curb the rot remain stalled. The Conflict of Interest Bill, which would bar public officials from awarding tenders to companies in which they have interests remains unsigned. President William Ruto recently returned the bill to Parliament for revisions, citing the need for tighter oversight and real-time disclosure mechanisms.

With counties spending approximately Sh200 billion a year beyond payroll, the scale of the abuse poses a serious risk to investor confidence, local development, and public trust. As the graft continues unchecked, the dream of decentralized governance is slowly being choked by those entrusted to protect it.