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Mbadi bets on Sh1bn automation to win battle against ‘tenderpreneurs’
Treasury Cabinet Secretary John Mbadi responds to a question from members of the Bunge la Mwananchi and residents during a dialogue session at Swahilipot Hub on March 7, 2025.
The Treasury has proposed to increase funding for IMF-backed automation of public tendering in a bid to lock cartels, who steal an estimated third of the annual budget, from fat State deals.
Cabinet Secretary John Mbadi is seeking lawmakers’ approval to raise allocation for the rollout of the electronic government procurement system (e-GP) by more than three-quarters (78.57 percent) to Sh1 billion for the year starting July.
The full implementation of the system will compel State ministries, departments, and agencies to initiate, evaluate and award tenders online, keeping human interaction to a bare minimum.
Budget documents tabled in the National Assembly show that Sh650 million will cater for expenses related to installing the system. The remaining Sh350 million will be spent on supporting State entities to implement the system, which was piloted last month on select State-owned entities.
Corruption in the public sector is seen as the “biggest industry” in Kenya, gulping down about a third of the annual budget, according to past estimations following findings by former Ethics and Anti-Corruption Commission chair Philip Kinisu in March 2016.
That will add to about Sh1.47 trillion in the current financial year ending June, where the budget is estimated at Sh4.47 trillion, including debt repayments and disbursements to counties.
“By automating the procurement process from budgeting to expenditure, we will be able to reduce wastage,” said Mr Mbadi at a past function.
“If you minimise human interaction with a system, it becomes more efficient. It can easily reduce corruption in our procurement system.” In April, the Treasury projected that removing paperwork and other clerical work from the tendering processes alone could save taxpayers between Sh50 billion and Sh100 billion.
The rollout of the e-GP system is part of public finance reforms that the International Monetary Fund has been pushing Kenya to implement to enhance transparency in procurement.
The system will be interfaced with the Integrated Financial Management Information System (IFMIS), which processes payments to suppliers and contractors. It will also be linked to the Kenya Revenue Authority in a policy shift to enhance transparency and nabbing tax cheats.
The tendering process automation is part of the reforms under the Public Procurement and Asset Disposal Act of 2015 and accompanying regulations.
The Public Procurement Regulatory Authority (PPRA) requires ministries, departments and agencies to upload awarded contracts containing beneficial ownership information to the public procurement information portal (PPIP).
The PPRA has been training procurement entities to improve their understanding of beneficial ownership disclosure obligations.
The Treasury cited a lack of budgetary allocations for the past failure to complete the rollout of the e-procurement system.
“The National Treasury has been dragging its feet in the implementation of an e-procurement system for nearly 10 years,” President William Ruto said during his constitutional annual State of the Nation Address late last November.
“I direct the National Treasury to roll out the e-procurement system by the end of the first quarter of 2025 and ensure that, going forward, only procurement undertaken through this system is sanctioned.”
The Treasury estimates full automation of public procurement will be completed by June 2028 at a cost of nearly Sh5.05 billion.
Besides the IMF, the US has also been mounting pressure on the Ruto administration to seal loopholes for corruption in procurement processes by the national and county governments. Washington says American firms have encountered cases where authorities at national and county government levels continue to directly ask for bribes from investors seeking government deals and other approvals.
“Corruption remains a substantial barrier to doing business in Kenya. US firms routinely report direct requests for bribes from all levels of the Kenyan Government,” the Office of the United States Trade Representative wrote in the 2025 National Trade Estimate Report on Foreign Trade Barriers in April.
