US graft shocker in new trade deals with President Ruto

Government officials accused of corruption stemming from US-funded projects and investments in Kenya will be removed from office as Washington adopts a carrot-and-stick approach to its trade and financing deals with the government of President William Ruto.

The United States announced some details of the business deals it had with President Ruto, revealed priority areas for investment and trade, and also showed what actions Americans will take to protect their billions from officials with itchy fingers.

The negotiations are a buildup to the Strategic Trade and Investment Partnership (STIP), a bilateral agreement that Kenya and the United States have begun to standardize on terms just weeks before the end of former President Uhuru Kenyatta’s term in office.

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A summary of the US proposals to President Ruto reads: “Provides procedures for removal of government officials accused or convicted of corruption, along with measures to prevent opportunities for corruption by members of the judiciary.”

“To prevent ill-gotten gains from being hidden, the text also includes a provision requiring the maintenance of a central register for companies to report beneficial ownership information.”

The talks were officially launched in July 2022 in a virtual meeting between former Secretary of Commerce Betty Maina and US Trade Representative Catherine Taye.

President Ruto and Trade CS Moses Kuria have since taken up the bilateral talks, with the latter saying in April that the talks are proceeding smoothly.

In exchange for investments worth billions of shillings, Kenya will have to ensure strict enforcement of laws against bribery of public officials, embezzlement and money laundering.

Kenya will also have to keep up-to-date records and books of account, be firm in recovering assets derived from bribery or corruption under projects and provide channels for reporting corruption that are expected to protect whistleblowers.

After training to detect corrupt activities, government officials under US-funded projects are expected to report any conflicts of interest or actions related to graft.

President Ruto was also tasked with filling any loopholes that might be exploited to bribe judicial officers in cases that might result from funded projects.

The United States is also calling for a greater role for civil society and nongovernmental organizations in combating graft.

“Since the fight against corruption requires the active participation of segments outside the public sector, this provision requires measures to enhance the participation of institutions, civil society, non-governmental organizations, labor organizations and community-based organizations through public information and education programmes, public awareness and dissemination of information related to bribery and corruption,” the US said. .

In addition, the text includes a provision requiring government contractors to maintain a written code of business ethics and conduct and to perform due diligence to prevent and detect criminal behavior.

Other aspects of the talks saw the US suggest that industry regulators act independently of the sectors they monitor.

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However, regulators of the financial services sector such as the Central Bank of Kenya and the Capital Markets Authority will be subject to a different set of rules to protect their unique responsibility to ensure the stability of their respective industries.

This comes as President Ruto issued a circular instructing all cabinet ministers, accounting staff and CEOs of state companies among other government employees to individually take the lead in fighting corruption.

“You are personally responsible for any breach of the legal and policy provisions governing the exercise of your powers in the use of public resources,” reads the circular from Chief of Staff and Chief of Public Service Felix Koski dated June.

Micro, small and medium enterprises (MSMEs) are set to be among the biggest beneficiaries of business deals, as the US intends to provide capital and training opportunities to Kenyans through businesses in this category.

Women, youth, minorities, start-ups, and agricultural and rural SMEs will have top priority in funding and training opportunities.

Capital is expected to be provided in the form of low interest loans and grants. Farmers will also reap a lot if the two governments agree.

The United States intends to invest in food security programs.

Farmers who use science-based solutions to ensure sustainable food production will be eligible for financing.

The agricultural initiative will also open doors for farmers to export their produce to the United States and other countries.

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