Kenya takes the first position in Africa in stealing money given as aid, a new investigation by the World Bank reveals, indicating the deep corruption that is eating away the country.
The money is stolen by politicians and senior civil servants, the bank reveals, who hides it in countries with secret banking laws says the report titled; “Elite Capture of Foreign Aid: Evidence from Offshore Bank Accounts.”
At the moment, Kenyans hold massive Sh306 billion in secret bank accounts located in countries such as Switzerland, Luxembourg, Cayman Islands, Bahamas, Hong Kong and Singapore among others.
Worse, the World Bank reports that there is always an increase of this money every time Kenya receives more aid.
For Kenya, the World Bank reveals that the stolen aid money grows by approximately 2.4% every year.
It becomes even worse for Kenyans to know that out of the 22 countries in the world that are most aid-dependent, Kenya was only defeated in stealing aid money by Jordan. The third-largest thieve of aid money is DRC.
The politicians and senior civil servants deliberately avoid hiding the money in countries that do not have secret banking laws, the investigation reveals.
“Aid disbursements to highly aid-dependent countries coincide with sharp increases in bank deposits in offshore financial centers known for bank secrecy and private wealth management, but not in other financial centers,” noted the report.
The investigation is based on data on aid disbursements from the World Bank and foreign deposits from the Bank for International Settlements.
“In our main sample comprising the 22 most aid-dependent countries in the world (in terms of WB aid), we document that disbursements of aid coincide, in the same quarter, with significant increases in the value of bank deposits in havens.”
“Specifically, in a quarter where a country receives aid equivalent to 1% of gross domestic product (total value of the economy), its deposits in havens increase by 3.4% relative to a country receiving no aid; by contrast, there is no increase in deposits held in non-havens.”