NAIROBI, Kenya – Kenyan taxpayers have lost a staggering Sh6.6 billion in a failed government-backed edible oil importation scheme, according to revelations from the Senate Trade, Industrialisation, and Tourism Committee.
The Kenya National Trading Corporation (KNTC), tasked with importing affordable edible oil to cushion Kenyans from rising commodity prices, admitted that gross mismanagement and corruption played a role in the loss.
The Senate Committee, chaired by Kajiado Senator Lenku Ole Kanar, found that out of Sh9 billion set aside for the programme, Sh6.6 billion was squandered due to poor pricing and diversion of imported oil.
Evidence presented to the committee showed that nearly 800,000 twenty-liter jerrycans of edible oil, intended for local consumption, were diverted and sold to two companies—Environ Pro and EnBV Kenya—for re-export at significantly lower prices.
Documents tabled in the Senate revealed that KNTC sold the jerrycans at Sh3,028 each, while the local retail price for the same container was around Sh5,000.
Under the government’s plan, KNTC was expected to sell the oil at approximately Sh4,800 per jerrycan, allowing the agency to recover costs.
However, this pricing gap resulted in significant losses, with taxpayers footing the bill.
Marsabit Senator Mohamed Chute expressed concern over KNTC’s decision to resell the imported oil at such a loss.
“The question is, where did the money go, and how much did we recover from these sales?” he asked.
KNTC’s acting managing director, Peter Njoroge, defended the corporation’s actions, claiming that the duty-free exemption applied only to import duty, not to other taxes such as VAT, which they were unable to pay.
KNTC reported earning Sh25.975 billion from the sale of 1.6 million jerrycans, almost half of the total 2.2 million units imported under the programme.
However, the corporation’s financial records revealed significant overpayments to suppliers. For instance, Multi Commerce and Charma Holdings were paid between Sh3,871 and Sh3,355 per jerrycan—far above the contractual agreement of Sh2,967 to Sh3,355.
Further complicating matters, KNTC finance manager Lucy Anangwe disclosed that the agency overpaid one supplier, Multi Commerce, by nearly Sh1.2 billion, a discrepancy that remains unresolved.
Additionally, the Senate Committee raised concerns over financial mismanagement, noting that KNTC documented expenditures of Sh69 billion, yet only reported supplies worth Sh59 billion—a Sh10 billion shortfall.
Senators pressed KNTC to clarify how it plans to recover the Sh6.6 billion in losses, which stem from a combination of mismanagement, currency fluctuations, and unaccounted funds.
KNTC chairman Hussein Dabasso attributed part of the losses to the depreciation of the Kenyan shilling, which traded at Sh150 to the dollar during the importation period.
The Kenya National Trading Corporation (KNTC), tasked with importing affordable edible oil to cushion Kenyans from rising commodity prices, admitted that gross mismanagement and corruption played a role in the loss.
The Senate Committee, chaired by Kajiado Senator Lenku Ole Kanar, found that out of Sh9 billion set aside for the programme, Sh6.6 billion was squandered due to poor pricing and diversion of imported oil.
Evidence presented to the committee showed that nearly 800,000 twenty-liter jerrycans of edible oil, intended for local consumption, were diverted and sold to two companies—Environ Pro and EnBV Kenya—for re-export at significantly lower prices.
Documents tabled in the Senate revealed that KNTC sold the jerrycans at Sh3,028 each, while the local retail price for the same container was around Sh5,000.
Under the government’s plan, KNTC was expected to sell the oil at approximately Sh4,800 per jerrycan, allowing the agency to recover costs.
However, this pricing gap resulted in significant losses, with taxpayers footing the bill.
Marsabit Senator Mohamed Chute expressed concern over KNTC’s decision to resell the imported oil at such a loss.
“The question is, where did the money go, and how much did we recover from these sales?” he asked.
KNTC’s acting managing director, Peter Njoroge, defended the corporation’s actions, claiming that the duty-free exemption applied only to import duty, not to other taxes such as VAT, which they were unable to pay.
KNTC reported earning Sh25.975 billion from the sale of 1.6 million jerrycans, almost half of the total 2.2 million units imported under the programme.
However, the corporation’s financial records revealed significant overpayments to suppliers. For instance, Multi Commerce and Charma Holdings were paid between Sh3,871 and Sh3,355 per jerrycan—far above the contractual agreement of Sh2,967 to Sh3,355.
Further complicating matters, KNTC finance manager Lucy Anangwe disclosed that the agency overpaid one supplier, Multi Commerce, by nearly Sh1.2 billion, a discrepancy that remains unresolved.
Additionally, the Senate Committee raised concerns over financial mismanagement, noting that KNTC documented expenditures of Sh69 billion, yet only reported supplies worth Sh59 billion—a Sh10 billion shortfall.
Senators pressed KNTC to clarify how it plans to recover the Sh6.6 billion in losses, which stem from a combination of mismanagement, currency fluctuations, and unaccounted funds.
KNTC chairman Hussein Dabasso attributed part of the losses to the depreciation of the Kenyan shilling, which traded at Sh150 to the dollar during the importation period.
