THE PRACTICAL POLITICS OF

Public procurement in Kenya (prototype)


Author: Peter J Evans
Product No: Prototype
Date: June 2025
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About the author

Peter Evans is the Programme Director of Open PEA.

Summary insights 

In Kenya, public procurement is economically vital yet subject to systemic leaks. It is the mechanism for spending 1.76 trillion Kenyan shillings (KSH) (13 billion US dollars (USD)) annually on  growth and service delivery, but 10–25% is lost to corruption and inefficiency. Kenya’s fiscal crisis and the collapse of international aid make tackling these losses an urgent need.

Leaking budgets underpin Kenya’s elite bargain (the unspoken deal that determines the allocation of power and resources in a country): they are reported to finance electoral campaigns, patronage networks and illicit financial flows.

The legal framework for public procurement is robust, but practice deviates from the rules, due to overlapping systems, manual processes, and weak enforcement. 

Kenya’s new e-Government Procurement (eGP) system can help tackle these issues by reducing waste; helping tackle political corruption; and boosting growth, development and investment.

The economic case for eGP is strong: its annual budget of around USD 5 million could yield savings of USD 278 million each year – a 1:55 return on investment.

However, despite international backing and World Bank loans, progress on implementing eGP has been slow, due to budget constraints, resistance from vested interests, and bureaucratic inertia.

Successful implementation of eGP hinges on political leadership, sufficient funding, public communication, and coalition-building with civil society, the private sector, and oversight institutions. Without this, eGP could stall or remain a superficial reform.

Summary propositions

The current window of opportunity for implementing eGP and reforming public procurement in Kenya may close in mid-2027, when the presidential elections could lead to a return to electoral ‘business as usual’. It is important to accelerate transformational change now, to shift how Kenya’s elite bargain relates to public procurement. We recommend the following:

  1. Make a credible political case for procurement reform.
  2. Give eGP the right budget: spending now will save much more, every year.
  3. Build a coalition of expectation around the benefits of procurement reform.
  4. Put in place strong, wide ranging change management processes.
  5. Apply longer, deeper pilots and phased roll-out

I) WHAT IS THE PROBLEM?

Public procurement in Kenya is a vital economic lever but also a longstanding governance challenge. The procurement system channels a very large share of government spending into the infrastructure, goods, and services that are critical to delivering development and growth, and attracting investment [1]. Public procurement is the major channel for the annual development budget and recurrent expenditure, which total around 1.76 trillion Kenyan shillings (KSH) (13 billion US dollars (USD)). However, it has been claimed that 10–25% [2] of Kenya’s public procurement budget is lost to corruption and inefficiency. This implies KSH 176 billion (USD 1.31 billion) in annual losses, at the lowest estimate. Such losses inevitably reduce the effectiveness of investment.

Kenya’s development budget is particularly vulnerable to leakage because it is directed towards large capital investments, such as roads and power infrastructure. At KSH 746.3 billion (USD 5.57 billion) in the current financial year, 10% leakage of this budget would mean a loss of KSH 74.6 billion (USD 557 million). For comparison, Kenya’s total public debt was around USD 83 billion [3] (51% of GDP [4]) in mid–2024 and total annual aid was around USD 2.65 billion in 2022 [5].

Sectors with particularly high levels of financial risk, and thus risk of leakage, are national security, health, agriculture, rural and urban development, energy, infrastructure, and information and communication technology [6]. Furthermore, Kenya’s 47 county governments are reported to face high procurement risk.

Shortcomings of Kenya’s procurement system

While Kenya’s procurement laws are fairly robust, practice often departs from the formal rules. The Office of the Auditor General (OAG) consistently flags [7] procurement irregularities, questionable awards, inflated prices, and suspicious documentation, while the media regularly reports on procurement corruption [8], often involving politicians.

A significant complication is that procurement operates across thousands of procurement entities (involving tens of thousands of procurement officers) and via multiple, overlapping channels: a partial digitised system (the IFMIS [9] Procure to Pay (P2P), module), alongside paper-based and manual processes. In addition, some of Kenya’s many parastatal organisations use their own bespoke systems [10].

Added to this complexity are capacity challenges, such as power cuts, system downs, and low bandwidth. This creates an environment in which ‘workarounds’ are essential to keep basic functions rolling, but these are inefficient and make corruption easier [11].

The numerous manual processes in the procurement system allow for wide-ranging discretion, manipulation, and fraud. Forged documents might be uploaded and budgets exceeded but infractions will not be picked up until audits months or years later.

Corrupt acts in Kenya’s public procurement system are wide-ranging and often brazen: uploading forged minutes of tender committees to IFMIS; forging signatures of experts and approving officers; collusion in the technical specification of calls to suit a particular supplier; and awarding contracts to politically connected firms without a genuine competitive process. All these acts are easier to execute when procurement records are spread over disparate, poorly synchronised systems.

The effect of procurement corruption on Kenya’s political system

In Kenya, systemic corruption rewards corrupt officials with bribes and provides kickbacks to politicians who direct contracts to their allies or themselves [12]. Procurement budgets are looted for personal gain and to fund political campaigns, with the budgets of phantom infrastructure projects used to fill election campaign coffers. Procurement budgets can therefore compromise electoral competition.

Procurement corruption also reduces public trust in politicians. Repeated coverage of high-profile procurement scandals erodes public trust in the government’s ability and willingness to control leakages. Indeed, Kenya’s 2024 political and economic crisis was driven in part by frustrations over corruption in procurement, with protestors perceiving that procurement deals favour elites and foreign investors over local communities.

A way forward: the electronic Government Procurement (eGP) system

Many of the problems in Kenya’s public procurement could be addressed by Kenya’s long-planned eGP system, which offers ‘end to end’ procurement and contract management that could reduce existing inefficiency and make discretion, corruption, and political capture of public procurement far more difficult to pull off and easier to detect. eGP could reduce procurement costs by 10 to 15%, around KSH 90 billion annually (USD 0.67 billion) [13]. However, so far, eGP’s development and initial implementation has been slow, in part due to budget shortfalls. Furthermore, there are vested interests that would like to see eGP stall.

II) WHO ARE THE PLAYERS?

Kenya’s public procurement system is shaped by a variety of interest groups, some of whom have a stake in maintaining the status quo, and it serves relatively narrow elites, at the expense of Kenyan citizens. In this ‘elite bargain’ [14] (the unspoken deal that determines the allocation of power and resources in a country) the most influential players are ruling political parties and their allies in business and the bureaucracy. Outside this elite, there are a range of other actors, some of whom are lobbying for change in Kenya’s public procurement system, or that would benefit from reform but know little about it.

The political executive

Despite allegations of procurement corruption within his government [15], Kenya’s President has signalled a strong interest in modernising public procurement by rolling out eGP. In late 2024, he instructed his cabinet to make eGP mandatory across national and county governments in 2025. He frames eGP as a cost-saving measure and is also reported to be a strong supporter of ensuring 30% of public procurement involves businesses led by women, youth, and persons with disabilities.

While ‘tone at the top’ can galvanise action, well-intentioned directives can stall without the needed budgetary allocations (funds for the eGP have not matched the President’s ambition), and the President’s directives may also be at odds with technical readiness and commitment in the public sector.

Politicians

Kenya’s ‘political classes’, such as members of the National Assembly and the Senate, have strong interests in the current public procurement system, including through direct engagement in government contracting. The Assembly and Senate are perceived to have slowed down and diluted anti-corruption-related legislation, such as laws on conflicts of interest [16], and to have limited the annual budget for reforms (including the eGP). Some politicians may therefore seek to actively undermine the eGP’s implementation, perceiving it as a challenge to their procurement-related interests.

The National Treasury and its Procurement Directorate

The National Treasury holds the purse strings for the public sector, and its Procurement Directorate is tasked with designing and implementing eGP, and is one of 12 entities implementing eGP pilots. However, the Procurement Directorate faces insufficient funding, some wider bureaucratic inertia, and competition from the Treasury’s IFMIS Directorate, which runs the IFMIS P2P.

Public Procurement Regulatory Authority (PPRA)

Established under the 2015 Procurement Law, the PPRA is responsible for setting procurement standards, for training, and for compliance checks. The PPRA also operates the Public Procurement Information Portal, which lists tender opportunities and contract awards, increasing transparency in procurement. However, only a minority of Kenya’s thousands of procuring entities consistently upload data to the portal, limiting its impact. The portal should be redundant if eGP is successfully implemented.

Oversight agencies

The OAG, the Ethics and Anti-Corruption Commission (EACC), and Office of the Director of Public Prosecutions (ODPP) all have roles in preventing procurement fraud: the OAG audits public entities and exposes irregular expenditures, and missing and forged documents; the EACC investigates alleged corruption; and the ODPP conducts prosecutions. A fully functional eGP would enhance these agencies’ access to real-time data, aiding their work.

Procurement officers

Kenya’s thousands of procuring entities have tens of thousands of procurement officers. Many of these are well-trained and dedicated professionals who are certified by the Kenya Institute for Supplies Management (KISM). However, some use the current procurement system to enrich themselves, including accepting kickbacks and forging documents. Even officers inclined to act ethically may struggle under political or administrative pressures [17]. The transition to eGP will reduce procurement officers’ discretionary power, and so might be resisted by those officers who benefit from the status quo.

State-owned enterprises (SOEs) and parastatals

Kenya’s parastatal sector is large and diverse. Entities like the Kenya Ports Authority, Airport Authority, and Electricity Transmission Company manage substantial capital budgets, sometimes exceeding those of smaller ministries, and have hundreds of procurement officers. SOEs often run procurement functions through bespoke ERP systems, and they may be reluctant to migrate to the national eGP platform, particularly if they believe that their current system is already efficient and effective.

Private firms

The private firms that supply publicly procured services and goods in Kenya fall into two categories: some firms dominate government contracting, and thus benefit disproportionately from the current system; while others (ranging from micro enterprises to large multinational corporations) often experience serious challenges to doing business, including opaque bidding systems, demands for bribes, and delays in receiving payment. For international firms with public integrity commitments, this can mean that they actively avoid doing business with the Kenyan government.

The eGP could enable more small and medium-sized enterprises (SMEs) and international bidders to participate in public procurement contracting, which would increase competition and thereby drive quality up and prices down. However, since many potential suppliers are unaware of the eGP, expectation and demand are currently very limited.

Civil society

Civil society organisations and journalists should have a role to play in public procurement, by analysing procurement data and highlighting irregularities. However, even civil society organisations that focus on transparency and open government have so far been largely absent from Kenya’s eGP process. This is a missed opportunity.

Although Kenya’s 2024 youth-led protests suggest there is a latent public demand for cleaner government, this has not been harnessed for procurement reform via the eGP. At the same time, while the Access to Government Procurement Opportunities (AGPO) scheme (which seeks to increase participation of enterprises owned by women, youth, and persons with disabilities in government opportunities) provides a means for wider citizen inclusion in procurement, there are reports that AGPO certification may be fraudulently obtained by businesses connected with Kenya’s elites.

International partners

The World Bank and other international agencies (the International Monetary Fund, the African Development Bank, bilateral agencies) have a long-held interest in improving Kenya’s public procurement. They fund infrastructure projects, social programmes, and sector-specific investments, and they encourage stronger oversight, accountability, and value for money for all investments, regardless of the source. The World Bank and the European Union have supported the development and implementation of the eGP, through budget support and programmatic lending, including disbursement based on milestones such as eGP pilots in procuring entities. However, milestones have slipped, partly because the eGP and pilot entities do not receive a sufficient government budget allocation.

III) THE RULES OF THE GAME

Although Kenya’s legislative framework for procurement aligns with many international best practices, in practice, informal norms and rules continue to shape daily operations.

Formal legal framework

Key pillars of Kenya’s procurement law include Article 227 of the Constitution (2010), which mandates fairness, equity, transparency, competitiveness, and cost-effectiveness [18]; the Public Procurement and Asset Disposal Act (2015), which sets procedures, thresholds, and guidelines for public entities; and Executive Orders and Treasury Circulars, which set out further requirements.

Under the formal framework, procurement officers must use open tendering for any contract above a certain monetary threshold, and use single sourcing or restricted tendering only under specific conditions. In practice, threshold manipulation, overuse of emergency clauses, and splitting large projects into multiple smaller ones appear common.

Kenya’s approach to conflict of interest is an outlier: under existing legislation, politicians can engage as government suppliers in sectors in which they have a public role. Draft legislation that would stop this has been stalled and diluted.

Budget processes

Budgetary decisions are made through the interplay of the National Treasury, National Assembly, Senate, and Presidency. During times of fiscal strain (as in 2024), development budgets and some reforms—including digitisation—are squeezed. While the President announced that the eGP would be rolled out quickly, its budget was then cut.

Informal norms and actual practices

Day-to-day practices often diverge from Kenya’s formal framework for procurement. As indicated above, procurement staff and politicians sometimes circumvent thresholds, manipulate specifications to favour specific bidders, receive bribes, or misuse public contracts to fund electoral campaigning. For their part, suppliers sometimes offer kickbacks or pay facilitation fees to expedite release of funds, in a context of regular late payment. These informal norms inflate bid prices, as companies factor corruption risks and payment delays into their commercial proposals, with the public footing the added bill.

The current IFMIS versus the upcoming eGP

Kenya’s experience with the current IFMIS has been mixed. Although IFMIS P2P has brought elements of automation into the procurement process, critics note its frequent downtime, limited user-friendliness, and reliance on manual processes and workarounds. The eGP, which aims to be an end-to-end platform (covering tender announcements, bid evaluations, contract award, and payment), will in theory eliminate many such workarounds. However, there is a risk that the two systems might be regarded as in competition with each other, or run in parallel indefinitely, perpetuating inefficiencies, discretion, corruption risks, and leakage. Moreover, there may be resistance to adopting the eGP among those who see IFMIS as tried and tested.

The ‘elite bargain’ relating to public procurement

Kenya’s ruling elites, and the ‘elite bargain’ or ‘political settlement’ that sustains their power, are sustained by public resources, including those linked to public procurement. Kenyan politicians across the spectrum are perceived to extract funds and political influence from the awarding of government contracts. This operates throughout the electoral cycle: as an incentive for standing for public office in the first place; as a reward for winning [19]; as a mechanism for recovering costs invested in running for office; and as a way to secure the deals, coalitions, and support needed to sustain power in office, through distributing ‘rents’ (unearned wealth) and influence to other elite groups (other politicians, public sector unions, allies in the private sector and the bureaucracy), and refill ‘war chests’ for future elections.

In particular, the use of procurement to maintain political patronage networks undermines the formal democratic process, as public resources meant for development are diverted towards narrow political or personal interests. However, at the same time, public procurement and its budget are also a foundation of Kenya’s relatively stable political equilibrium, and this is one reason why the pressure to implement reform seems limited.

IV) THE STATE OF PLAY

The potential benefits of reforming Kenya’s public procurement are multifaceted: in addition to reducing waste of public funds and improving the fiscal balance, reform could help improve development outcomes, boost growth, improve the broader business climate, increase inflows of foreign direct investment (FDI), improve citizens’ trust in government, and help reshape Kenya’s electoral politics. Implementing the eGP is the most promising vehicle for reforming public procurement. However, as indicated in the preceding section, some in Kenya’s dominant elite have clear incentives for defending the status quo.

eGP and enduring reform

After years of delay, and failure by domestic reformers and external actors to achieve reform of public procurement, change is now underway. It is important to note that this progress appears to be in spite of the fiscal and political crisis of 2024, not because of it. However, while the President’s timeline for implementing eGP is well intended, it will be technically challenging to achieve, in particular due to budgetary pressure. Indeed, the biggest binding constraint on eGP implementation is currently the absence of a viable government budget for implementation. Whether such a budget can be put in place will reveal whether the momentum for reform is more powerful that underlying political resistance.

The current pilots of the eGP system, taking place in 12 entities, have limited depth and duration – in contrast to electronic procurement pilots elsewhere (e.g. Rwanda) which put all procurement budgets at a given entity through eGP for a full fiscal year, before being rolled out to further entities over successive years. If this is a portent of things to come, there is a risk that eGP will be rolled out thinly and haltingly, with the new system having only partial coverage – like the Public Procurement Information Portal – and so seen as a half-hearted reform. If this happens, and if eGP does not demonstrate early results and build momentum, it could be perceived as a failure and may cause a scandal like that surrounding the social health system [20].

A key limitation of the eGP reform to date is a near absence of public communication to build demand among the private sector, citizen entrepreneurs, civil society, and the media. This is in contrast to other countries, where broad-based coalitions in favour of reform have been a key success factor. While the current eGP pilots will not realise the projected headline benefits (in terms of cost, transparency, and competition) for many months, in the immediate term, data on efficiency savings (e.g. from printing costs and paid for press adverts) could be used to build support for the reform.

V) OUR PROPOSITIONS

The way forward

Public procurement reform, including the eGP system, would reshape Kenya’s longstanding elite bargain, which has underpinned successive governments and their dominant coalitions and which has contributed to Kenya’s relative stability and two decades of growth (considerably better than the average for sub-Saharan Africa). Politically feasible reform is typically about rebalancing and adjusting an elite bargain, not breaking it.

Enforcing formal procurement rules, adopting new procedures, reducing the grip of informal norms, and changing the bureaucratic and political culture relating to procurement is a multi-year challenge. It needs steady effort, persuasion, learning, and adaptation, to achieve transformative results in the medium to long term. This calls for a multi-stakeholder change management process. Over-expectation, and rushing through thin technical changes without underlying behavioural and culture change, could be a path to failure.

Win-wins and gambling on development

Even if procurement reform is successful, Kenya’s elites, and their networks, will adapt and will continue to wield influence over public procurement in any future bargain. The practical aim should therefore be to encourage transition, limit excesses, and nurture ‘win-wins’ in procurement that have spillovers on growth, investment, service delivery, public trust, the social contract, and politics. Such win-wins would be mutually reinforcing and would benefit citizens and elites alike. This would constitute a ‘development bargain [21]’, which refers to the situation in which a country’s elites shift from protecting their own positions to gambling on a growth-based future. This is how economies typically modernise. In this framing, today’s politician contractor in Kenya who steals competitions might adapt over time to be an effective and competitive supplier, winning on quality, reliability, and price. The alternative— a moral struggle of good versus bad—simply mobilises those who oppose reform.

Even when the eGP system is in place and is functioning properly, some politicians and suppliers will naturally seek to game it. Bangladesh’s eGP provides an example in this regard [22], with collusion and deals fixed before data is logged in the eGP. Here, it must be remembered that risk management in general, and anti-corruption in particular, are games of ‘whack a mole’ [23]: you need to keep whacking the moles to displace and disrupt corruption, while trying to find out where the moles are coming from.

A limited window of political opportunity

The current window of opportunity that exists for catalysing reform might be short lived. Kenya’s next Presidential election is expected to be held in August 2027. If eGP does not take hold before then, there is a likelihood that electoral ‘business as usual’ will prevail, including using procurement budgets to fund election campaigns, particularly in the 12 months before polling day.

Shifting politicians’ view of public procurement as a source of loot and largesse to a more sophisticated understanding of the possible win-wins, based on the political benefits of tangibly delivering more growth, development, and jobs, is a profound challenge. However, without this effort, the current reform may remain superficial.

We offer five propositions for reforming public procurement in Kenya:

1. Make a credible political case for procurement reform 

The public argument for procurement reform in Kenya has focused on transparency and accountability, and sometimes on tackling corruption and reducing waste and losses. This is relatively abstract (transparency and accountability) and negative (anti-corruption). More positive and politically salient framing could stress the opportunities of reform, and could be linked more clearly to meeting the demands of the protestors of 2024, as well as visible action ahead of the election in 2027. For example, the following points can be made:

  • Public procurement can unlock growth and bring opportunities to far more Kenyans: to become successful entrepreneurs, to ‘do business with government’, and to create more and better jobs. This would benefit the nation at a time of fiscal stress.

  • Opportunity for all is baked into Kenya’s procurement law: under the AGPO, 30% of contracts are earmarked for businesses led by youth, women, and persons with disabilities. eGP can unlock these benefits and thereby meet the expectations of the youth protests in 2024. This also aligns with Kenya’s ‘Bottom-Up Economic Transformation Agenda’.

  • The current fiscal crisis, and aid shocks, make reform an even more urgent need, in order to get the best out of every shilling that the government spends, and to unlock effectiveness in development, growth, and investment. Countries with cleaner and fairer, public procurement are better at pulling in foreign investors and international firms, and at creating more jobs and innovation. This is what Kenya needs right now.

  • Reforming public procurement is overdue and is central to modernising Kenya. eGP can make procurement at every level faster, cheaper, cleaner, fairer, and better for all. It will do for government budgets what Mpesa has done for every Kenyans’ own money.

  • eGP offers opportunities for all, but everyone has a duty – including all political parties – to pull together in the national interest, to build Kenya’s economy and make it more resilient, boost growth, and deliver what ordinary Kenyans need most: jobs.

    These arguments could be used to frame the government’s change management, public communication, and political strategy – to further develop the positive ‘tone from the top’.

2. Give eGP the right budget: spending now will save much more later

Without a realistic year-on-year government budget allocation, the government’s commitment to procurement reform looks thin. While external donors could potentially fill the budget gap, this risks turning eGP into yet another donor-funded project (as was the case with the Public Procurement Information Portal – and unlikely in the context of development aid cuts.)

There is an exceptionally strong economic case for funding eGP: if eGP’s annual implementation budget is around USD 5 million, the annual return would be worth many times this, and would continue year on year. For example, if half of the estimated 10% leakage in the development budget was saved, the annual input of USD 5 million could yield KSH 37 billion (USD 278 million) each year – a 1:55 return.

3. Build a coalition of expectation around the benefits of procurement reform

Those championing eGP reform have so far neglected civil society and the private sector. There is a need for public communication with current and potential interest groups to i) prepare existing suppliers for imminent technical changes; ii) deliver on eGP’s vision of maximising the inclusion of prospective new suppliers and minimising opportunity for discretion by officials, as well as continued ‘capture’ by regular and known suppliers; and iii) build wider understanding, expectation, and demand amongst businesses, investors, civil society and media. This would increase the pressure to deliver eGP and to demonstrate its real-world benefits in the medium term (relating to data analytics, cost savings, and the opportunities created). One possible communication method is rolling town hall meetings (hosted by media outlets) involving policy makers and civil society. Global experience can also be tapped, such as Rwanda’s use of press conferences at which suppliers registered live, as well as regular public updates on the progress of eGP.

4. Put in place strong, wide-ranging change management processes

To yield the promised results, the eGP reform must overcome political barriers and inertia, and shift bureaucratic culture. To this end there is a need for a wide-ranging change management strategy that presents a compelling and positive vision for reform within government and puts in place iterative processes to learn by doing and to refine the project over time. This goes beyond the technical training of procurement officers and the orientation of suppliers on using the new platform: it also involves incentivising uptake and compliance, including by requiring major spending departments to create their vision for change in their own specific business areas.

The change management processes around eGP should take account of the proven risks of procurement in major ministries and agencies, but also harness the opportunity eGP provides for these entities to do their jobs better. For example, early action could be directed at sectors in which rapid procurement reform could be most beneficial for Kenya’s economy, such as those closest to international investment. With more dynamic implementation of eGP, and monitoring of reservation mechanisms (e.g. AGPO criteria applied to downstream suppliers), and local manufacturing rules, stressing opportunities could be a powerful and positive way of catalysing take-up of eGP.

5. Apply longer, deeper pilots and phased roll-out

Dynamic change management should help close the implementation gap between the ‘tone from the top’ and the technical reality of implementing eGP. At the same time, the current pilots could be reconfigured to reflect practical experience of success elsewhere, such as the staged roll-out in Rwanda, which built stakeholder buy-in and allowed for ongoing refinement. One option is to extend the duration of the pilots in current entities, and add pilots in a few major spending agencies (e.g., infrastructure and health), and in each, channel all procurement budgets through eGP for at least one full fiscal year.

Real-time data from these pilots can be used to highlight the technical challenges involved, to track procurement officer compliance, to assist in troubleshooting, as well as to demonstrate early cost savings. Once the pilots yield lessons, a staged roll-out could occur in all ministries (year 2), in parastatals (year 3), then in county governments. A phased approach could also test existing parastatal ERP procurement systems on a case by case basis, and set a sunset date for the use of the IFMIS procurement module.

Counter-intuitively, after years of slow progress, this may mean extending the eGP pilots and slowing down roll-out to maximise the likelihood of transformational change and real-world impact, rather than emphasising speed at the expense of depth. In the interest of long-term success, this would be worth it.

Further reading

For those wanting to read more we suggest the following texts:

Ethics and Anti-Corruption Commission (EACC) (2015) “An Evaluation of Corruption in Public Procurement in Kenya.” https://eacc.go.ke/default/wp-content/uploads/2018/09/Evaluation-of-corruption-in-the-public-procurement.pdf

Adam, I., David-Barrett, E., & Fazekas, M. (2024). “The Political Economy of Open Contracting Reforms in Low- and Middle-Income Countries.” Governance, Volume 38, Issue 2, April 2025. https://onlinelibrary.wiley.com/doi/10.1111/gove.12897

Open Contracting Partnership (2022) “Fulfilling the Promise of e-Procurement Reform”. https://www.open-contracting.org/wp-content/uploads/2022/10/OCP22_Africa_eGP.pdf

For deeper background of the analysis and ideas underpinning this PPP note we have intentionally included detailed end notes as well as references.

Endnotes

  1. Comparative studies demonstrate that the quality of public procurement is positively correlated with growth and FDI, though the relationships are context-specific and depend on the shape of the economy. Growth benefits depend on the use of public procurement to deliver growth-enhancing policies; competition to drive quality up and prices down; and the design of procurement instruments to specifically create jobs, social benefits, and incentive innovation. In general, l[ocal procurement increases the revenues of local firms, reaching workers, suppliers, providers of capital, and business owners.]{.mark} See: What Works Centre for Local Economic Growth (2023) “Evidence briefing: Assessing the local economic impacts of local procurement”, https://whatworksgrowth.org/resource-library/evidence-briefing-assessing-the-local-economic-impacts-of-local-procurement/

    [There is a strong correlation between FDI flows and the practice of procurement regulation (more competition, less collusion, and less favouritism), which increases the interest of foreign investors in participating in the local market.]{.mark} See World Bank Blogs (2020) “Good procurement practices attract FDI”, https://blogs.worldbank.org/en/developmenttalk/good-procurement-practices-attract-fdi#:~:text=In%20other%20words%2C%20FDI%20is,when%20participating%20in%20procurement%20auctions 

  2. “Costs associated with corruption in the public procurement process are estimated to be 10 – 25 percent of the contract value awarded”. In: World Bank (2023) “Second program for strengthening governance for enabling service delivery and public investment in Kenya. Program appraisal document”: https://documents1.worldbank.org/curated/en/099110823124529438/pdf/BOSIB09a20732b090082ba0833643ce1578.pdf 

  3. See https://www.ceicdata.com/en/indicator/kenya/national-government-debt#:~:text=Kenya%20National%20Government%20Debt%20reached,Sep%201999%20to%20Sep%202024

  4. See https://www.imf.org/external/datamapper/profile/KEN 

  5. See https://data.worldbank.org/indicator/DT.ODA.ALLD.CD?locations=KE 

  6. Kenya’s Institute of Economic Affairs uses contract data (FY 2015–16 to 2023–24) from Kenya’s Public Procurement Information Portal and audit reports (from the OAG) to compile a dashboard. https://ieakenya.shinyapps.io/Public_Procurement_Risk_Index_Dashboard/ 

  7. OAG (2023/24) “Auditor General’s Report on National Government Ministries Departments and Agencies FY 23–24”. http://www.parliament.go.ke/sites/default/files/2025-02/Report%20of%20the%20Auditor%20General%20on%20National%20Government%20Ministries%2C%20Departments%20and%20Agencies%20for%20the%20Year%202023%EF%80%A22024.pdf 

  8. See for example: NTV Kenya (2023) “The graft burden: Four major scandals in the Ruto administration”, NTV Kenya, 14 September. https://ntvkenya.co.ke/news/the-graft-burden-major-corruption-allegations-in-president-rutos-administration/ 

  9. The Integrated Financial Management Information System (IFMIS) has been rolled out in many countries as a public financial management standard. IFMIS’s procurement module does not have the full ‘end to end’ functionality of a typical electronic procurement system and is not an eGP. 

  10. Some, such as Kenya’s Airports Authority and Port Authority, are very large, while others are small. Parastatal procurement systems are sometimes a component of their bespoke enterprise resource planning (ERP) systems. 

  11. EACC (2015) “An Evaluation of Corruption in Public Procurement in Kenya”. https://eacc.go.ke/default/wp-content/uploads/2018/09/Evaluation-of-corruption-in-the-public-procurement.pdf 

  12. Ibid.: “Procurement decisions in public institutions were influenced by politicians, senior civil servants, and management of various state corporations having particular suppliers being favored for award of tenders. Intimidation of procurement officials followed by conflict of interest was other tools used to influence procurement decisions”. 

  13. Cabinet meeting on 15 January 2024. See https://nairobilawmonthly.com/cabinet-greenlights-consolidation-of-govt-funds-from-commercial-banks/ 

  14. On elites and the elite bargain: “‘Those with power’ are the economic and political elite—the business leaders, the political establishment, military commanders, and often public intellectuals and journalists, union leaders and prominent academics—that is, those who in the end have the power and influence to drive decision-making about the economy and society. … Their power stems from a deal, called the elite bargain, that determines the allocation of power and resources. This bargain or agreement is typically informal and implicit: a shared commitment and not some kind of legally binding arrangement.” From: Dercon, S. (2022) ‘Gambling on Development: why some countries win and others lose’. Hurst and Company. London. p.4. 

  15. See for example: All Africa (2025) ‘Kenya: Muturi Accuses Ruto of Corruption in Explosive Tell-All Interview’, All Africa, 4 April.

    https://allafrica.com/stories/202504040180.html 

  16. See for example: Capital FM (2024) “Ruto Criticizes MPs Over Conflict of Interest Bill Delay, Directs Treasury to Roll Out E-Procurement”, Capital FM, 21 November: https://www.capitalfm.co.ke/news/2024/11/ruto-criticizes-mps-over-conflict-of-interest-bill-delay-directs-treasury-to-roll-out-e-procurement/ 

  17. 17 

  18. Constitution of Kenya (2010), Article 227 

  19. As conveyed in the phrase “our turn to eat”, a saying used by Kenyan communities and political leaders who feel that they have been excluded and expect to have a chance to benefit from state power. https://www.oxfordreference.com/display/10.1093/acref/9780191828836.001.0001/acref-9780191828836-e-259 

  20. See for example; Citizen Digital (2025) ‘State sinks Ksh.104.8B into SHA system it neither owns nor controls — Auditor General’. 03 March. 

  21. Dercon, S. (2022) Gambling on Development: why some countries win and others lose, Hurst and Company. London. p. 4. 

  22. On the Bangladesh eGP: “...the e-GP system was introduced in 2011 to make public procurement transparent. However, a 2023 TIB study revealed that work orders in the tendering process are often pre-decided due to collusion between bidders and officials involved in the e-GP system. Not only has the e-GP system been monopolised … a majority of high-value contracts have been deliberately excluded from the e-GP system. Now, the government's reform process aims to bring all eligible government purchases under the e-GP platform, as recommended by the World Bank. But if the government can break the unholy nexus between and among corrupt politicians, administrative officials and contractors, the procurement system may be streamlined. Otherwise, the evil nexus will find other means to subvert the reform measures”. From: Financial Express (2025) "Editorial: Reforming public procurement, Financial Express, 10 February. 

  23. The arcade game Whac-A-Mole  involves quickly and repeatedly hitting the heads of mechanical moles with a mallet as they pop up from holes. For the use of the expression in relation to anti-corruption strategies, see David-Barrett, E. (2020) “Anti-corruption in Aid-funded Procurement: Whacking the Mole is Not Enough”, Governance & Integrity, Anti-Corruption Evidence and Research Programme. https://giace.org/anti-corruption-in-aid-funded-procurement/

    Seen from this perspective, Kenya’s public procurement would benefit from an analysis that unpacks corruption by type and severity, in terms of the negative impact on growth and development. This could be approached by adapting the frameworks by Ang (2020) (Unbundling Corruption: Why it matters and how to do it," OECD. https://oecd-development-matters.org/2020/06/25/unbundling-corruption-why-it-matters-and-how-to-do-it/) or Khan et al. (2019) (Anti-corruption in adverse contexts: strategies for improving implementation, SOAS ACE Working Paper 013. https://eprints.soas.ac.uk/32530/1/ACE-WorkingPaper013-AntiCorruptionAdverseContexts-Text-190909.pdf) to distinguish between types such as outright theft (most damaging) and ‘access money’ (less damaging and a logical response to overbearing red tape, which is formalised and legal in some countries).