NAIROBI: THE Ethics and Anti-Corruption Commission (EACC) recently released a 2024 report on corruption in Kenya. For economists, the report continues to demonstrate that corruption is a significant, entrenched impediment to economic development in the country.
While the EACC report paints a gloomy picture of corruption, other credible Kenyan sources suggest that the country loses up to 1.5 billion US dollars annually due to corruption, public-sector inefficiency and state capture.
To be in the same picture on matters related to corruption in Kenya, the National Ethics and Corruption Survey, 2024, conducted by the EACC, provided a comprehensive, detailed analysis of the state of corruption in Kenya.
The survey findings indicate that corruption and unethical behaviour are prevalent in the nation, with the primary forms in public service being bribery, favouritism, abuse of office, tribalism, nepotism and misappropriation of public funds.
The report further noted that the primary causes of unethical conduct and corruption in the public service remain greed and a lack of integrity among public officials.
According to the report, these factors have led to a decline in economic growth, a deterioration in the quality of life for Kenyans and a rise in the cost of living.
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As corruption and unethical practices remain among the most significant and urgent issues in the country’s economic development, the Commission’s commitment to preventing and combating corruption, economic crime and unethical conduct in Kenya warrants support should Kenya need to bring their house in order.
In my view, this can be achieved through effective law enforcement, public education, and the promotion of standards and practices in integrity, ethics and anti-corruption that are currently missing.
This is further demonstrated by the haemorrhaging of public funds, estimated by Treasury CS John Mbadi at up to KSh 2 billion per day, which, in my view as an analyst, cripples essential services, increases public debt and discourages investment.
In a way, the EACC report’s findings aren’t much different from the African Development Bank’s position.
According to the African Development Bank, Kenya’s economy suffers an annual loss of approximately 1.5 billion US dollars due to illicit financial flows and corruption, money that economists believe could be used to finance infrastructure, education and health care to benefit the majority of Kenyan people.
I will examine six key economic areas to illustrate how corruption is undermining the Kenyan economy, beginning with the fiscal drain and debt crisis, as evidenced by the EACC report and my own analysis, having spent considerable time reviewing Kenyan public reports on corruption and unethical practices in the management of public spending.
Kenya’s Gross Domestic Product (GDP) is approximately 7.8 per cent, of which a significant share comprises massive annual losses and corruption-related losses.
For instance, the EACC analysis report indicates that the debt-to-GDP ratio of 67.4 per cent in late 2024, well above the IMF’s 50 per cent threshold, reflects the misappropriation of public funds and necessitates increased borrowing to finance development projects.
Therefore, in my view, wasteful spending leads to inefficiencies in public spending, which frequently arise from inflated procurement contracts, resulting in an additional 5 per cent of GDP. Key economic sectors are destroyed as a result of corruption.
For example, infrastructure inflation is often exaggerated to facilitate bribery. This is evident when I examine the EACC report in detail.
For example, the estimated cost of renovating the existing line is 150 million US dollars while the Standard Gauge Railway (SGR) Phase 1 cost approximately 3.6 billion US dollars. In the same vein, funds intended for essential healthcare and education services are frequently embezzled, resulting in substandard public services.
Additionally, corruption at customs and ports has allowed counterfeit goods to inundate the market, thereby destroying local manufacturing and undermining fair competition in agriculture and trade.
The impact on business and investment is not exempt. The report, though it doesn’t openly state this, notes that it signals state capture, with political elites dominating law-making and enforcement, thereby generating uncertainty that discourages both domestic and foreign investment.
In my assessment, this results in a high cost of doing business, further exacerbated by bribery, which is often necessary to navigate bureaucratic red tape for licenses and construction permits.
Consequently, public procurement is highly susceptible to bribery, leading to the awarding of contracts to incompetent, connected firms rather than to the most efficient Kenyan bidders.
The entrenchment of poverty and inequality, alongside wealth concentration, is a comprehensive consequence of this. A small oligarchy, often comprising political officeholders, has amassed substantial wealth, while 8,000 individuals possess more wealth than the bottom 99.9 per cent of the population.
This results in an elevated cost of living. The purchasing power of ordinary citizens is directly reduced by corruption in the management of key resources, such as maize imports, which drives up food prices. According to my evaluation, devolution, intended to distribute resources, has facilitated the transfer of corruption from the central government to county administrations.
This is what I would describe as institutional and social decay within economic governance. Weakened institutions: Key anti-corruption bodies, such as the EACC, frequently face limited resources, slow judicial processes and a lack of political will, resulting in few high-profile convictions.
Additionally, a culture of impunity persists. The belief that the political elite can plunder with impunity will continue to undermine trust in government institutions. For example, ineffective justice often means the judicial process is slow, with some cases lasting over a decade.
Additionally, in certain instances, bail is cheaper than bribes, which can trap citizens in a cycle of poverty. As of late 2025, corruption remains the primary threat to Kenya’s economic stability.
The African Development Bank has emphasised the need to address state capture and strengthen institutions to support economic recovery. Kenya’s capacity to finance its own development is severely constrained without a comprehensive solution to the widespread plunder of public resources. I will be unable to delve deeper into the report due to space constraints on the paper.
However, those interested in the impact of corruption and bribery culture on the Kenyan economy and in how corruption is resulting in inflated procurement contracts that cost an additional 5 per cent of GDP, can find this report in the National Ethics and Corruption Survey (NECS), 2024, EACC Research Report No. 17, published in February 2025, spanning 73 pages. I am confident that you will discover information that others may not wish to make public.
