Radical Reform: Auditor’s Report Reveals KFIC’s Deep-Rooted Corruption

By Andrew Mwangura

Email, thecoastnewspaper@gmail.com

The Kenya Fisheries Industries Corporation (KFIC), once envisioned ask a pillar of economic empowerment for coastal communities, has devolved into a symbol of systemic rot within Kenya’s public sector.

The latest Auditor General’s report for the year ended June 2024, building on the damning revelations from the previous year’s audit, exposes a corporation mired in corruption, financial mismanagement, and operational paralysis.

These findings are not mere administrative oversights; they represent a deliberate erosion of public trust and resources, demanding nothing short of a total overhaul.

KFIC’s failures undermine the livelihoods of thousands of fisherfolk and squander the potential of Kenya’s blue economy, which could be a vital engine for national growth. It’s time for decisive action to dismantle this corrupt edifice and rebuild it from the ground up.

At the heart of the crisis is a pattern of financial irregularities that scream of graft.

The 2024 report reveals unsupported expenditures on refined fuel and lubricants totaling Kshs. 2.4 million, with no contracts or procurement documents to justify the outlay, in blatant violation of the Public Procurement and Assets Disposal Act.

This isn’t an isolated incident; the previous audit for 2023 highlighted similar gaps, including unreconciled cash balances exceeding Kshs. 61 million and unexplained variances in income and board allowances.

Board expenses alone ballooned to 48% of the operational budget in 2024, far surpassing legal caps set by presidential directives, while over-expenditures on travel and subsistence allowances topped Kshs. 8.9 million beyond approved limits.

These are not errors born of incompetence but hallmarks of a system where public funds are siphoned off through fictitious claims and unchecked perks.

The absence of basic documentation fosters an environment ripe for embezzlement, where insiders can pocket money meant for fish processing plants and marketing initiatives that could sustain entire communities.

Worse still, KFIC’s governance structure is a hollow shell, perpetuating this cycle of abuse. For over three years, the corporation has operated without a substantive Chief Executive Officer, relying on acting appointments that breach human resource policies and rack up unnecessary allowances.

There is no approved staff establishment, leaving the organization staffed by temporary workers, interns, and volunteers—a recipe for inefficiency and accountability evasion.

The 2023 report already flagged the lack of a strategic plan, board charter, and risk management policy, all essential tools for transparent operations.deae1d Unresolved issues from prior audits linger like open wounds, with receivables outstanding for years and revenue from major projects, such as the tuna fish hub worth over Kshs. 700 million, simply unrecorded.

This isn’t oversight; it’s a deliberate strategy to obscure tracks, allowing corruption to flourish unchecked. In a sector where fish is the lifeblood of coastal economies, such neglect translates to lost opportunities: processing facilities idle, markets underserved, and small-scale fishers left to fend for themselves against exploitative middlemen.

The implications ripple far beyond KFIC’s balance sheets. Kenya’s fisheries sector employs over two million people and contributes significantly to food security and exports, yet corruption here erodes that foundation.

When funds meant for modernizing cold storage or expanding aquaculture vanish into thin air, communities in Kisumu, Mombasa, and beyond suffer.

Fisherfolk, already grappling with overfishing and climate change, see their potential earnings diluted by a corporation that prioritizes boardroom indulgences over real development.

Nationally, this feeds into the broader narrative of public sector graft, where parastatals bleed the economy dry—estimated losses from corruption in Kenya run into billions annually.

The Auditor General’s adverse opinions on KFIC’s financial statements for consecutive years underscore a corporation that is not just failing but actively harming the public interest.

Without intervention, KFIC risks becoming another casualty in the graveyard of mismanaged state entities, further entrenching inequality and disillusionment among Kenyans who expect better from their government.

A total overhaul is the only viable path forward. This cannot be a superficial cleanup—patching leaks while the dam bursts.

The government must dissolve the current board and management, appointing an independent task force to investigate and prosecute those implicated in these scandals.

Forensic audits should trace every shilling, with assets frozen and recoveries pursued aggressively.

Structurally, KFIC needs reimagining: integrate it into a more accountable framework under the State Department for Blue Economy, with mandatory digital tracking for all transactions to curb opacity.

Adopt a zero-tolerance policy on procurement, enforcing e-tendering and third-party verification.

Most crucially, empower local stakeholders—fisherfolk cooperatives and community leaders—in decision-making to ensure the corporation serves its mandate rather than elite interests. International best practices, like those from transparent fisheries models in Norway or Senegal, could guide this rebirth, emphasizing sustainability and equity.

President Ruto’s administration has pledged to fight corruption, but words must yield to action. The Auditor General’s reports are wake-up calls, not footnotes. Delaying reform only emboldens the corrupt, prolonging the agony for ordinary Kenyans.

A revitalized KFIC could unlock the blue economy’s promise, boosting GDP and alleviating poverty. But that future hinges on bold, immediate steps to uproot the rot.

The time for half-measures is over; Kenya deserves a fisheries corporation that fishes for progress, not plunder.

The author is a policy analyst specializing in maritime governance and blue economy development.