WB delays $260m to Kenya

2006-01-31 11:42

Nairobi, Jan 31 -

The World Bank has delayed the release of some 260 million dollars (215 million euros) in loans to Kenya over corruption concerns amid new graft allegations that have rocked the east African nation, officials said Tuesday.

The money, approved in October 2004 and earmarked for education, banking reform, budget support and HIV/AIDS programmes, will not be disbursed until the institution is convinced that President Mwai Kibaki's government is meeting commitments to fight corruption, they said.

"We have delayed about 260 million dollars because of concerns about corruption," World Bank country director for Kenya Colin Bruce said through a spokeswoman. "The money will be released once the bank is satisfied that the government is making successful efforts in fighting corruption."

A team from the Washington-based bank was already in the country investigating the situation and was preparing an "Integrity Report" on Kenya that "will be the basis for releasing the money", the spokeswoman said.

Last week, the World Bank drew criticism when it approved a 25-million-dollar (20-million-euro) credit for Kenya to help fight corruption just days after new allegations implicating sitting cabinet ministers in a lingering graft scandal exploded in the local and international media.

Through the spokeswoman, Bruce said the timing of the approval of the credit was "purely coincidental" but that the bank's board of directors had been aware of the fresh charges.

"The board members are aware of the corruption issues and felt that corruption issues should be dealt with strategically," he said. "The signals we have been sending to the government are very strong. We cannot stop funding just because we are emotive."

In approving the credit, he noted the bank had said the latest allegations were an "excellent opportunity" for Kibaki to fulfill anti-graft pledges he made before sweeping to power three years ago on a reform platform.

The new corruption charges have caused a furore in Kenya, where government sleaze has been rife for years despite pledges by Kibaki administration to crack down on it.

Anger intensified on Monday when corruption watchdog Transparency International released a report showing the government had spent 12.2 million dollars (10 million euros) on high-end luxury vehicles largely for the use of senior officials while much of the country languishes in poverty.

The allegations, made by Kibaki's former top anti-graft advisor who resigned his post early last year and fled to Britain citing death threats, involve the long-simmering so-called "Anglo Leasing" scandal and several other questionable government procurement contracts.

The president's former aide, John Githongo, accused the current vice-president and two powerful cabinet ministers of involvement in a scheme to bilk the government out of more than 200 million dollars (163 million euros). He suggested that Kibaki had refused to take action.

Those named by Githongo have vehemently denied the charges, which have prompted opposition demands for mass cabinet sackings, new elections and even the president's resignation.

Government spokesman Alfred Mutua on Monday furiously denied any allegation of wrongdoing by Kibaki and warned that "malicious falsehoods that are an attack on the person and character of the president and undermine the institution of the presidency" could be prosecuted.

At the same time Mutua said the government was stepping up anti-graft operations in a bid to dispel perceptions it was not meeting its obligations.

Despite Kibaki's vows to clean up graft, donors say corruption may have cost Kenya up to a billion dollars since 2002, nearly a fifth of the country's 2004-05 official state budget of about 5.5 billion dollars (4.5 billion euros).

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AFP

- AFP