World Bank dismisses report showing Moi, Kibaki cronies hiding Sh328 billion abroad

In Summary

• The report ranked Kenya second to Jordan, accusing senior public officers in former President Mwai Kibaki and Daniel Moi governments of hiding $3.1 billion (Sh310 billion) in tax havens.

• This is the latest report linking elites in former regimes to illicit financial flows.

World Bank country director Felipe Jaramillo with Treasury CS Ukur Yatani on August 6, 2019.
World Bank country director Felipe Jaramillo with Treasury CS Ukur Yatani on August 6, 2019.
Image: COURTESY

The World Bank has dismissed a report showing elite Kenyans are hiding billions of US dollars of foreign aid cash in offshore accounts as "illogical and controversial".

Felipe Jaramillo, World Bank country director for Kenya, told the Star during a virtual press conference that the report, though partially done by World Bank staff, was not sanctioned by the lender.

"Yes, I have seen the sessional paper published sometime in February. I however have serious doubts about the methodology used. It is not a World Bank publication," Jaramilo said on Friday.

 

Dubbed 'Elite Capture of Foreign Aid: Evidence from Offshore Bank Accounts', the report offers details of how the Kenyan ruling elite enrich themselves by channeling foreign aid money meant to help the vulnerable to their accounts in tax havens including Luxembourg, Mauritius and Panama.

The report ranked Kenya second to Jordan, accusing senior public officers in former President Mwai Kibaki and Daniel Moi governments of hiding $3.1 billion (Sh310 billion) in tax havens.

This is the latest report linking elites in former regimes to illicit financial flows.

In 2016, the famous Panama Leaks named several state officials, including Sally Kosgei, a powerful head of civil service during the Moi era and former Deputy Chief Justice Kalpana Rawal who have since denied the allegations.

The study was conducted by Bob Rijkers of the World Bank, Jorgen Juel Andersen of BI Norwegian Business School, and Niels Johannesen of the University of Copenhagen. It covers two decades between 1990 and 2010.

The study compared data on aid disbursements from the World Bank with foreign deposits from the Bank for International Settlements (BIS), focusing on 22 aid-dependent countries including Kenya, Uganda and Tanzania.