Kenya govt to automate payments to stop revenue leaks

By Semaj Itosno, Nairobi, Kenya

Kenya will adopt a paperless payment system to stop revenue leakages in its system.

According to ICT Cabinet Secretary, Fred Matiang’i, the process shall be complete by April 2, 2014 and is aimed at improving accountability, efficiency and transparency in Government transactions and prevent revenue leaks,

He said electronic payments have been proven to boost economic growth, while advancing financial inclusion.

 “The National Treasury will publish regulations to operationalise the Public Payment Act before the electronic payment system starts operating…the Government have done so much in terms of digitising its payment system. What we want to do now is to ensure that this process is institutionalized,” said the Cabinet Secretary.

The move comes as Kenya’s economy comes under threat of a crunch due to too much revenue waste and overspending in public wages.

According to Kenya’s Auditor General, Government ministries and departments failed to account for over Sh338 billion of the total Government spending for the 2011-2012 fiscal year.

The Auditor General said only six per cent (Sh55.2 billion) of the Sh920 billion that the Government spent during the financial year was fully accounted for.

An additional expenditure of Sh561 billion was not supported by adequate documents, thus the move to automate the payment system to seal loopholes for corruption.

The auditor said a third of the 252 financial statements of institutions audited were either deliberately misstated or revealed fraudulent expenditure, according to the Auditor General.

The new payments system would therefore help track Government transactions electronically hence eliminate fraud.

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