Tender Rigging in Kenyan Counties Offers Warning to South Sudan

(NAIROBI) – Kenya’s Financial Reporting Centre (FRC) has flagged widespread fraud in devolved county governments, with billions of shillings lost annually through rigged tenders and illicit payments to companies linked to public officials. The revelations come at a time when South Sudan is studying regional models of devolution.

The FRC, which tracks suspicious financial flows, reported that over KSh 200 billion is mismanaged yearly by Kenya’s 47 counties, excluding staff salaries. This amounts to approximately USD 1.547 billion or SSP 7.2 trillion using official July 2025 exchange rates.

According to the FRC, top county officials are colluding with tender committees to direct contracts to companies secretly owned by themselves, their family members or political allies. Banks flagged over 130 suspicious transactions, many involving kickbacks, forged documents and irregular bidding procedures.

In one anonymous county, 15 firms were awarded tenders for cleaning, fumigation, construction and landscaping services despite being owned by county employees or their relatives. All companies were registered on the same day, and some won contracts before they were even officially registered. These 15 firms received KSh 361.86 million in payments, equal to USD 2.798 million or SSP 13.02 billion.

Further investigations showed that tender documents were either undated, mismatched or issued after services had already been delivered. In some cases, different companies received duplicate local service orders (LSOs) for the same job. The funds were later withdrawn in structured cash amounts below the reporting threshold or transferred to bank accounts of county employees and related firms.

In another case, five construction companies tied to a married couple received contracts worth KSh 1.226 billion across three counties, equivalent to USD 9.482 million or SSP 44.6 billion. These companies were linked to senior officials from County K, including a chief officer and a Public Service Board member. The FRC found payment documents riddled with inconsistencies, including tender numbers that didn’t match contract awards and invoices addressed to the wrong firms.

Another example involved a community based organisation (CBO) in County Y that received KSh 185.69 million in June 2023 (USD 1.434 million or SSP 6.67 billion). The money was supposedly for emergency assistance, but the project proposal was drafted a month before the CBO was even registered. The funds were then moved to hardware suppliers linked to construction projects.

The FRC report highlights how some corrupt officials use proxies and CBOs as fronts to launder public funds. The watchdog has forwarded its findings to Kenya’s Directorate of Criminal Investigations (DCI) for action.

Kenya’s devolved system, once seen as a model for local development, is now plagued by the same corruption that afflicts national institutions. While the devolution framework was meant to improve service delivery and bring governance closer to the people, it has instead opened new avenues for mismanagement.

Efforts to pass Kenya’s Conflict of Interest Bill, 2023, which aims to block public officers from doing business with government entities, have stalled. President William Ruto returned the bill to Parliament in May 2025, arguing that Senate amendments weakened key sections related to gift bans and ownership disclosures.

The situation in Kenya provides key lessons for South Sudan, where debates over local governance and fiscal decentralisation are ongoing. Any move towards devolution must be backed by clear laws, oversight bodies and anti-corruption safeguards.

Currency Conversion Table (July 2025 Official Rates)