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Mystery of Sh164bn smuggled into Kenya

Discussion in 'Kenyan News and Politics' started by Smatta, May 21, 2010.

  1. Smatta

    Smatta JF-Expert Member

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    May 21, 2010
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    A massive Sh164 billion in hard currency has found its way into the Kenyan economy — and the government is unable to explain its source.

    The $2.1 billion inflow has left government statisticians and donors scratching their heads for answers, fuelling concerns that Kenya may be turning into a money laundering destination by Somali pirates.

    The large foreign currency injections are captured in the latest balance of payments statistics published by the Central Bank of Kenya.

    Ransom money

    It is all happening against a backdrop of intense speculation that millions of dollars in ransom money paid to Somalia-based pirates end up in Kenya. Profits from smuggling and other suspect foreign funds in the economy of the lawless state may be another source of the money.

    In addition, the large Somali Diaspora around the world could be remitting the money, which ends up in the property sectors of Nairobi and other major towns in Kenya. In January this year, the matter prompted the Office of the President to order investigations into trends in property purchases in Nairobi.

    On paper, the massive figure is reflected in the books of the government as ‘errors and omissions’ on the capital and financial accounts. But in reality, this huge figure is the total of the large foreign currency inflows, whose sources the Central Bank of Kenya cannot explain.

    Even more intriguing is the fact that there has been a massive increase within one year of foreign exchange whose sources cannot be traced. The statistics show that as at January last year, the figure for ‘errors and omissions’ in the country’s balance of payments accounts was at $1.1 billion.

    Export earnings

    Having risen to $2.1 billion, the current level represents a massive 100 per cent increase within a year. The mysterious billions are over and above the combined last year’s export earnings from coffee, tea and horticulture. As a matter of fact, the line ‘errors and omissions’ has grown into the single largest item in the economy’s balance of payments statistics.

    The riddle of the mysterious billions has quickly become a major talking point within both Nairobi’s financial community and donor circles. Central Bank of Kenya governor Njuguna Ndung’u conceded that the strange inflows had become a big worry. He said the cash was “artificially driving the country’s balance of payments surplus”.

    “We do not know where this money is from,” he added, promising that the Central Bank was designing new systems to trace the sources of such funds. The International Monetary Fund (IMF), which keeps close tabs on international capital flows, has already initiated discussions on the issue with the government, Central Bank of Kenya and some of the large commercial banks and foreign currency dealers.

    According to IMF senior resident representative W. Scott Rogers, part of the billions flowing into the economy may be coming from Somali pirates, but he stressed that the situation was not wholly attributable to such activity. He told the Daily Nation that difficulties in capturing foreign exchange inflows by expatriates, the donor community and international NGOs had clearly aggravated the situation.

    He also disclosed that the Kenya National Bureau of Statistics had commissioned a survey on all foreign exchange inflows not captured in official reporting channels. Prof Ndung’u maintained that since Central Bank was already receiving returns on Diaspora remittances from banks every month, it will now ask all commercial banks to provide it with returns on official donor flows coming through the banking systems and non-governmental organisations.

    “We strongly believe that this is what is missing and giving us a large ‘errors and omissions’ figure we cannot explain”, he added, promising to make public the findings of CBK inquiries. Since last year, Kenya has not been exporting enough, causing dwindling export revenues and a situation where imports far exceed exports.

    As at the year ending December 2009, the external current account, which reflects performance of the country’s exports and imports, had worsened considerably, recording a deficit of $2.2 billion compared to a deficit of $2.1 billion in 2008.


    Whats your take..


    Let the money come and dont think where it's coming from. Kenya is benefiting from piracy more than the donors see it. Most of European countries are rich due to the head start they got from dirty money.



    The government should take the money and ue ti for mega infrastructural projects. Whatever the ghost that's bringing this money, it is much needed. It is obvioulsly only a problem because the "big men" in government cannot get it into their personal accounts; therefore they condemn it as bad money.


    this are some comments from the nation.. I think it has its benefits and disadvantages..
     
  2. Ntemi Kazwile

    Ntemi Kazwile JF-Expert Member

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    Oh God, I wish the Somalis' money could its their way into Tz economy to help the ailing Tshs... just joking
     
  3. Ab-Titchaz

    Ab-Titchaz Content Manager Staff Member

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    Smatta,

    wewe kweli hazikutoshi.Is this why the Kenyan Govt is releasing the pirates in their custody?...to go
    do more piracy as it is?

    Sometimes be careful what you wish for maana Al-Shabaab comes with this as an extra baggage.
    Yangu macho tu ndugu yangu.

    Have a piracy free day.
     
  4. Smatta

    Smatta JF-Expert Member

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    AB mie nimeridhika alhamdulillah, najua Al shabab ipo najua money laundering ipo (Lakini stats za sema Bongo ndiko kwenyewe- tulia naleta link). Kusema kweli, hii pesa ya piracy ukicompare na ile ilioporwa na wahindi na croonies wa Moi era za ninetees, waeza ona hizi za piracy atleast za leta maendeleo mijini na vijijini. Lets look at things in a laymans point of view.. ignoring inflation and high property values, most of the money from Somalia has found its way into major Kenyan towns, thus bringing with it employment, development and lots of opportunities that comes with money.. They have not stolen the money from the government coffers and though it should be regulated, I dont think we should raise the alarm, wacha Kenya iwe Swiss ya Africa. I have a friend who has a Eng consultancy firm, hivi majuzi amepata deal ya millions of shillings hapo Riverside drive ya apartment buildings za Msomali, wacha nchi iendelee, politicians are complaining because the money doesnt get to their pockets..
     
  5. Ab-Titchaz

    Ab-Titchaz Content Manager Staff Member

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    Aloo those people will take over the Jamhuri kisha nione mtaishi wapi.
     
  6. Smatta

    Smatta JF-Expert Member

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    Mie naja Bongo, ushasahau nina Mpare pale milimani? Lakini on some serious issues, they are talking about 2.1 billion dollars in the country from unknown sources, that's like golden berg, Anglo leasing money, but the only problem is that the latter is stashed in foreign banks, and invested in South African countries despite the fact that it was stolen from us. Angalia, the Construction sector registered the highest growth in employment rate growth due to the government road construction initiative and private building coming up, ingekuwa zile era za zamani hamna chochote, waiba hela zetu na wanaenda kuziweka kule swiss, si tuwache Wasomali pia wawaibie, kisha wainvest huku kwetu, watu wapate ajira na manufaa. Lets look at things with an open mind, hizo pesa zatumika, ziko kwenye circulation na zinabadilisha mkono sana, thats good for the economy I guess.. I aint an economist, am just saying..
     
  7. U

    Ubungoubungo JF-Expert Member

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    May 21, 2010
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    you should not spoil people in this forum to behave like a kenyan, unataka watu wapore pesa ili waje wawekeze kwenye nchi yetu watu wapate ajira? can't you see that you very unique in this forum mwenye kind ya thoughts kama hizo, tz doesn't play fouls like you do in kenya and we do not invite them to get into our country. shame on you!
     
  8. J

    Jasusi JF-Expert Member

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    Your wish is coming true. Nasikia Wasomali wameanza kununua mashamba na properties Tanga.
     
  9. m

    mmakonde JF-Expert Member

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    Hizi hela za pirate zinaishia Uarabuni hasa gulf states,then zinakuja kinyemela East Africa!
     
  10. n

    nomasana JF-Expert Member

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    i am with smatta on this one.

    if all the illegal bank accounts and money flow in swiss was to be shut down that country would massively SUFFER. it lives on illegal money.

    if the piracy money is being invested in kenya then so be it. i see people investing in the country as long as the money is not stolen tax payers money then i really do give a sh!t where the money comes from.
     
  11. Abunwasi

    Abunwasi JF-Expert Member

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    Smatta
    Isije kuwa hii ni ile pesa iliibiwa kule mombasa sometimes back kwenye gari ya kutawanya pesa kwani ninasikia kuwa ni karibu $200m
     
  12. Smatta

    Smatta JF-Expert Member

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    Tone down your viterol and lets discuss this issues with an open and sobber minds, i tend to beleive that we are all adults in this forum, so if my post can make you loot money from wherever it is you make your bread and invest it in kenya then you are outright dumb and have no business arguing with great minds here. shame on you.
     
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