REGULATION | Kenyan President Raises Alarm Over Compromised Lawmaking Processes

The President of Kenya has raised alarm saying the lawmaking process in Kenya is getting compromised by powerful individuals within the private sector.

According to the President, the process of lawmaking is being compromised by unorthodox means, including bribery of lawmakers to pass laws snd policies that serve the interest of specific firms as opposed to sectors and markets.

The President reportedly hinted at a trend where amendments are sneaked into bills especially at committee stages ultimately altering what has been agreed between the Executive Arms of Government and Representatives of the business community.

Whether the President was referring to the recent VASP bill saga is doubtful, but he describes a situation similar and familiar within the Kenya virtual assets community when claims of collusion to influence the upcoming regulation were brought to light by a local publication.

“I must tell you that many of your [Kenya Private Sector Alliance] members bribe committees of parliament. It is the reality. So in the process, you short-circuit these engagements [with business community].

We end up with legislations, policies and taxes that are skewed and that eventually distort everything that we are trying to do. So as an industry, you should get your members to engage with the government, executive, and legislature in the formal channels that we have established.”

Entrenched corruption in public and private sectors is seen as ‘the biggest industry’ in Kenya with reported cases of influential firms and businesses bribing government officials to ensure laws and policies that favor them are passed.

A proposal to set up a reporting mechanism by the business community for companies and individuals convicted of corruption with a view to blacklisting culprits is being considered.

In 2020, about 200 firms, including Safaricom and KCB, reportedly signed an industry-led code of ethics, committing not to do business with tainted entities and individuals after an anti-corruption partnership between private and public sectors was formalised.

The Kenya VASP Bill has been muddled with corruption claims and saw the Kenya Treasury withdraw the Bill, already in its second reading in Parliament, after it became clear it had been watered down particularly on AML issues.

Following a week of public uproar over the parliamentary proceedings on the Bill and how the proposed regulatory body was constituted, the Government withdrew the Bill for suggested amendments.

According to reliable sources, the bill was apparently watered down to the point that it needed a review by the relevant authorities before it can be brought back to the parliament floor for ascension.

A consultant close to the process told BitKE:

” The VASP bill has been parked until end of the month. The Government wants amendments that could water down controls and in particular AML/CFT requirements revised.

Issues of conflict of interest will also be reviewed.”

Vowing to curb such regulatory capture mechanisms, President Ruto said:

“I’ll be having a meeting with members of Parliament on this very subject because it is a source of concern that companies, through individuals, influence committees of Parliament, chairs of committees in Parliament or officials in government and we end up with a distorted policy environment that end up serving individual companies not the sector.”

As the digital lawyer warned in her op-ed:

Without rules, the board [VARA] can become a place for political favors rather than effective oversight. It shows exactly the risk Kenya is running.”

Stay tuned to BitKE for deeper insights into the evolving Kenyan regulatory space.

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