NAIROBI, Kenya – In a bid to curb corruption and reduce Kenya’s dependency on foreign debt, the National Treasury is setting its sights on a revamped digital procurement system, Cabinet Secretary John Mbadi announced during the State of Economy address on Wednesday.
By cutting corruption in half, Mbadi estimates the country could collect an additional Sh365 billion annually—enough to offset external borrowing.
Speaking at the National Treasury, Mbadi disclosed that Sh560 million has been allocated to finalize the digitization of Kenya’s procurement systems.
This new e-procurement system is expected to launch within the financial year and form part of a broader plan to modernize public financial management, improving transparency and accountability in the procurement process.
“A successful e-procurement system will not only save substantial financial resources but also instill public confidence that taxpayer money is used effectively,” Mbadi said.
The urgency of this reform is underscored by a recent report from Emerald Insight, revealing that 70% of Kenya’s corruption cases are tied to procurement fraud, particularly within government departments.
Currently, procurement of goods and services makes up roughly half of the government’s annual budget, and improving transparency in this area could result in significant financial relief for the country.
In addition to e-procurement, the Treasury is working toward implementing a Treasury Single Account (TSA), centralizing all government payments as mandated by the 2012 Public Financial Management Act.
The TSA and e-procurement system will be linked to the Kenya Revenue Authority, aiming to address tax evasion and strengthen financial oversight.
Mbadi emphasized that the new system will not only streamline processes but also reshape Kenya’s approach to funding large infrastructure projects.
Instead of taking on costly foreign loans, Kenya plans to prioritize Public-Private Partnerships (PPPs) for major funding needs.
“We will move away from the humiliation of relying on international loans to cover our budget deficits,” he stated, stressing the importance of self-sufficiency for national financial stability.
Kenya, currently ranked 126th out of 180 countries on the Transparency International Global Corruption Index, is estimated to lose about Sh608 billion annually—equivalent to 7.8% of GDP—to corruption, according to the Ethics and Anti-Corruption Commission.
By cutting corruption in half, Mbadi estimates the country could collect an additional Sh365 billion annually—enough to offset external borrowing.
Speaking at the National Treasury, Mbadi disclosed that Sh560 million has been allocated to finalize the digitization of Kenya’s procurement systems.
This new e-procurement system is expected to launch within the financial year and form part of a broader plan to modernize public financial management, improving transparency and accountability in the procurement process.
“A successful e-procurement system will not only save substantial financial resources but also instill public confidence that taxpayer money is used effectively,” Mbadi said.
The urgency of this reform is underscored by a recent report from Emerald Insight, revealing that 70% of Kenya’s corruption cases are tied to procurement fraud, particularly within government departments.
Currently, procurement of goods and services makes up roughly half of the government’s annual budget, and improving transparency in this area could result in significant financial relief for the country.
In addition to e-procurement, the Treasury is working toward implementing a Treasury Single Account (TSA), centralizing all government payments as mandated by the 2012 Public Financial Management Act.
The TSA and e-procurement system will be linked to the Kenya Revenue Authority, aiming to address tax evasion and strengthen financial oversight.
Mbadi emphasized that the new system will not only streamline processes but also reshape Kenya’s approach to funding large infrastructure projects.
Instead of taking on costly foreign loans, Kenya plans to prioritize Public-Private Partnerships (PPPs) for major funding needs.
“We will move away from the humiliation of relying on international loans to cover our budget deficits,” he stated, stressing the importance of self-sufficiency for national financial stability.
Kenya, currently ranked 126th out of 180 countries on the Transparency International Global Corruption Index, is estimated to lose about Sh608 billion annually—equivalent to 7.8% of GDP—to corruption, according to the Ethics and Anti-Corruption Commission.
