The fund, established in 2012 to help internally displaced persons (IDPs), squatters, and landless families, now stands accused of mismanagement, wasteful spending, and failing to fulfill its core mandate more than a decade later.

Idle Land, Forgotten People

The Auditor General’s November 2024 audit found that multiple high-value land parcels, purchased specifically for resettlement, remain idle and undeveloped.

Among the properties is the Kisima Njoro land in Nakuru, bought in 2012 for Sh396.9 million to house victims of the 2007–08 post-election violence. Twelve years on, the land is neither surveyed nor subdivided, and no beneficiaries have been resettled.

“At the time of audit in November 2024, the land had not been surveyed or subdivided, and the beneficiaries had not been settled,” Gathungu noted.

Additional dormant parcels include:

• Mikanjuni Farm in Kilifi, purchased in 2020 for Sh377 million, with beneficiaries identified but not settled.
• Mazrui Farm, acquired in 2022 for Sh445.4 million, only partially distributed.
• Kadza Ndani plot in Mombasa, bought for Sh378 million in 2020, still awaiting settlement of informal occupants.

“In the circumstances, the objective for which the parcels were acquired and value for money had not been achieved,” the report emphasizes.

Chronic Mismanagement and Ignored Recommendations

The audit sharply criticizes the persistent governance failures within the fund. Despite multiple past recommendations from the Auditor General’s office, management failed to act, allowing longstanding issues to persist unchecked.

“The issues still remained unresolved and management did not provide explanation for the failure to implement recommendations,” the report states.

Critically, the fund operates without any approved framework to identify, assess, or mitigate legal, financial, or operational risks. This lack of internal controls leaves billions in taxpayer money at risk of further misuse.

Unrecovered Debt and Ballooning Interest

The audit also reveals a troubling financial burden: Sh6.6 billion in historical loans dating back to 1962 remain unrecovered. Even worse, accrued interest has added another Sh5 billion, yet no tracking or recovery system is in place.

“Management did not have a clear policy on evaluation and management of accounts receivable,” Gathungu said, adding that the fund has made no provision for bad debts, a major red flag in financial management.

A Mandate Unfulfilled

Overall, the audit paints a damning picture of an institution that has not only failed to resettle landless Kenyans but also squandered public resources in the process.

As thousands of IDPs and landless families continue to wait in limbo, the Land Settlement Fund’s credibility hangs in the balance, with renewed calls for accountability and reform.

According to the charge sheet, Mohamed—alongside others not before the court—is accused of fraudulently obtaining the sum from Satho Umalkher Adan on June 29, 2023, by falsely claiming he was in a position to sell her a parcel of land.

The disputed property, registered as Block 1/168 in Garissa Municipality, was allegedly marketed to Adan under false pretenses, with Mohamed reportedly leading her to believe that he was the rightful owner.

However, during court proceedings, Mohamed denied the allegations, maintaining that he indeed owns the land in question and that the money he received from Adan was a genuine down payment for the property.

The businessman also contested the manner of his arrest, stating that he was apprehended in Eastleigh and that the arresting officers failed to inform him of the specific reasons for his detention.

While the prosecution did not oppose his release on bond, they requested the court to confiscate his passport to prevent the possibility of fleeing. Mohamed, however, told the court that he lost his passport two years ago and has not replaced it. He emphasized that he poses no flight risk, noting that his entire family resides in Eastleigh.

The court granted Mohamed release on a Sh5 million bond with a surety of the same amount, or alternatively, a Sh1.5 million cash bail. The case will be mentioned on April 29, 2025.

Ambassador Jamieson Greeer, in the annual report, cited corruption in government procurement processes as a persistent obstacle that has limited investment and fair competition for US firms in the country.

“Corruption remains a substantial barrier to doing business in Kenya,” the report states. “US firms continue to report challenges competing against foreign firms that are willing to ignore legal standards or engage in bribery and other forms of corruption.”

Procurement-Linked Bribery a Major Concern

According to the USTR, most bribes are demanded during procurement processes, a critical stage where companies seek contracts or tenders. The report accuses Kenya of failing to implement anti-corruption laws effectively, allowing these practices to persist unchecked.

“US firms continue to report direct and indirect requests for bribes from multiple levels of the Kenyan Government,” the report says.

Beyond Corruption: Land and Customs Challenges

The report also highlights other structural issues affecting US investors, including:

• Unclear land ownership laws for undeveloped land, which expose investors to fraud, fake title deeds, and unauthorized land sales.
• Delays at Kenyan Customs, where the report notes an inefficient and overly complex clearance process, despite the existence of a so-called single window system.

“US companies have raised concerns about the length of time required for Kenyan Customs to release shipments, as well as the use of a complex and inefficient process involving uncoordinated offices,” the report adds.

While the process for leasing developed land was described as clear and functional, the same could not be said for undeveloped plots—posing significant risks for new investors.

Implications for US-Kenya Trade Relations

This assessment comes at a time when Kenya is seeking to boost foreign direct investment (FDI) and strengthen economic ties with international partners like the United States. However, such reports may deter potential investors and delay negotiations for trade agreements, such as the ongoing US-Kenya Strategic Trade and Investment Partnership (STIP).

The USTR’s remarks could put pressure on Kenyan authorities to address long-standing governance and transparency issues that have plagued business confidence in the region.

Through a demand letter drafted by Ndegwa and Ndegwa Associates, the group—Kennedy Kariithi Gachenge, Lempaa Soyinka, Fanya Mambo, and Peter Kuira—argued that the money could be linked to corruption, as the President did not disclose its origin.

Suspicious Timing and Possible Corruption Links

The letter highlights that the donation came amid corruption scandals flagged by the Auditor General, including irregularities in the Social Health Authority (SHA). The group contends that by accepting the money, Bishop Mwai is “aiding and abetting the commission of a crime.”

They also questioned how President Ruto, whose monthly salary is capped at Ksh. 1,443,750 by the Salaries and Remuneration Commission (SRC), could afford to donate an amount nearly 20 times his salary—while also pledging an additional Ksh. 100 million to the church.

OCCRP Report and Legal Threats

The group cited the Organized Crime and Corruption Reporting Project (OCCRP), which ranked President Ruto as the second most corrupt individual globally in 2024. Based on this, they believe the funds may be proceeds of crime or fall under the category of “unexplained assets.”

They warned Bishop Mwai that failure to surrender the money to the EACC would result in legal action. “Perhaps, the idea of surrendering these amounts to the EACC would, in your view, appear to be very unpopular, but in the circumstances, it’s the best thing to do,” the letter stated.

Legal Implications Under Anti-Corruption Laws

The demand letter referenced Section 48 of the Anti-Corruption and Economic Crimes Act (ACECA), which criminalizes handling property acquired through corrupt means. Convictions under this law carry severe penalties, including a fine of up to Ksh. 1 million, a prison sentence of up to 10 years, or both.

If Bishop Mwai refuses to comply, the group has instructed their lawyers to initiate private legal proceedings against him. “Should the Ethics and Anti-Corruption Commission (EACC) bury its head in the sand, and should the Office of the Director of Public Prosecutions (DPP) fail to act, be assured that our clients will commence private prosecution to recover the said amount,” the letter warned.

Public Outcry and Planned Church Protest

The controversy has sparked outrage among Kenyans, with a section of the public threatening to stage a protest at Jesus Winner Ministry on Sunday if the funds are not surrendered.

As pressure mounts, all eyes are on Bishop Mwai—will he heed the call to return the money, or will he face legal and public backlash?

Widespread Clan-Based Hiring in Mandera County

According to the audit findings as of June 30, 2024, 1,918 out of the 3,761 county employees—representing 51% of the workforce—are relatives of the governor. This violates Section 7(2) of the National Cohesion and Integration Act, 2008, which stipulates that no public institution should have more than one-third of its staff from the same ethnic group.

The issue extends beyond county employees, as 11 out of 12 County Executive Committee (CEC) members also hail from the same clan, further entrenching dominance in governance structures.

Political and Administrative Control by a Single Clan

The audit also uncovered a concerning trend in Mandera’s political leadership. Key elected positions, including governor, senator, woman representative, and three out of six Members of Parliament, are all held by individuals from the dominant clan. Additionally, senior administrative roles such as county secretary and chief of staff are occupied by members of the same group.

This overwhelming control has sparked criticism from residents and governance experts, who argue that such practices undermine fair representation and inclusivity.

Public Outcry Over Hiring Disparities

Mandera residents have voiced their frustrations over the county’s recruitment bias. Abdirahman Abdi, a local resident, confirmed the audit’s findings, stating, “That report is absolutely correct. When applying for a county job in Mandera, you are required to declare your clan. Preference is always given to candidates from the dominant group.”

This is not the first time clan-based favoritism has shaped Mandera’s political and administrative landscape. In 2016, the Garre Council of Elders mandated 24 politicians, including then-Governor Ali Roba and Senator Billow Kerrow, to step down in favor of a rotational leadership system among sub-clans. While this move aimed at promoting inclusivity, it also fueled tensions and political instability in the region.

Calls for Fairness and Inclusivity in County Employment

The revelations from the audit have reignited debates on equity and governance in Mandera. Many residents and advocacy groups are now urging authorities to implement fair hiring policies that provide equal employment opportunities regardless of clan affiliations.

With growing scrutiny from the national government and civil society, pressure is mounting on Mandera’s leadership to address these disparities and uphold Kenya’s diversity and cohesion principles in public service.

As concerns over governance integrity rise, the county’s hiring practices will likely remain under close watch, with demands for reforms to ensure fair representation, transparency, and equal opportunity for all Mandera residents.

Kenya and IMF Join Forces to Tackle Corruption

Mudavadi confirmed that a high-level meeting with IMF officials officially kicked off the IMF Governance Diagnostic Assessment Scoping Mission for Kenya. The comprehensive study will analyze governance structures and corruption risks, providing critical insights to inform future policies.

The launch meeting was attended by key stakeholders, including Rebecca A. Sparkman, IMF’s Deputy Division Chief, alongside Albert Mwenda, Director General for Budget, Fiscal, and Economic Affairs at the National Treasury, and Selim Cakir, IMF’s Resident Representative in Kenya.

Why This Assessment Matters

During discussions, Mudavadi emphasized the importance of this assessment in shaping Kenya’s governance and financial stability.

“We explored the mission’s objectives to assess corruption vulnerabilities and their potential impact on Kenya’s macroeconomic performance,” Mudavadi stated.

He urged the IMF team to ensure a broad and inclusive engagement process, involving various stakeholders from across government institutions, the private sector, civil society, and faith-based organizations.

Kenya’s Call for IMF Support in Governance Reform

This initiative follows an official request made by the Kenyan government on October 7, 2024. Mudavadi, after consultations with President William Ruto, signed the request, reinforcing the administration’s commitment to eradicating corruption.

“We need to take the fight against corruption a notch higher and cast away the spirit of corruption. The war on corruption has taken a long time. We must ask ourselves where corruption is domiciled so that we can tackle it head-on,” Mudavadi asserted.

The assessment will cover all government institutions and aims to strengthen governance, enhance transparency, and improve economic resilience.

What This Means for Kenya’s Economy

With the IMF’s expertise, Kenya seeks to identify and address corruption vulnerabilities, ensuring greater accountability and financial integrity. The findings from this assessment will help shape anti-corruption policies and bolster the country’s economic growth prospects.

Conclusion

Kenya’s collaboration with the IMF signals a renewed commitment to transparency, accountability, and long-term economic stability. As the assessment unfolds, its findings will play a crucial role in shaping governance reforms and reinforcing Kenya’s fight against corruption.

In her annual report on National Government Funds for the 2023/2024 Financial Year, Gathungu detailed two instances where loans were granted to individuals who were legally ineligible.

Loans to ‘Future’ Born Individuals

One particularly alarming case revealed that loans were credited to individuals who, according to records, were born in the future. Despite the audit period covering disbursements between July 2023 and June 2024, some beneficiaries had birthdates ranging from July 1, 2024, to December 31, 2073.

According to the report, Ksh31,135,690 was credited to accounts registered on Safaricom, Airtel, and Telkom. Additionally, Ksh681,395 was issued to Kenyans aged between 10 days and 18 years.

Concerns Over Loan Recovery

The audit raised serious concerns about the ability of President William Ruto’s government to recover these loans.

“The records are therefore unreliable, and the resultant data in the systems may not have adequate controls. In these circumstances, loan agreements with underage individuals are potentially unenforceable and increase the likelihood of default,” the report read in part.

Rising Non-Performing Loans

The report also highlighted a significant level of non-performing loans. At the time of the audit, outstanding loan repayments had reached Ksh8 billion—equivalent to 64% of the total loans disbursed.

In another troubling revelation, it was discovered that some accounts were closed after receiving loan disbursements.

“A review of loan accounts revealed that 1,041 Safaricom loan accounts, whose principal amount had not been fully repaid, were closed. The loans disbursed amounted to Ksh1,465,515, but were closed after repayment of Ksh646,870, leaving a balance of Ksh818,645, which ought to have been collected before closing the accounts,” the auditor reported.

“Further, there were thirty (30) loan accounts with a total of Ksh598,987 that were closed without repayment of the loan balances.”

Call for Accountability

The audit findings raise serious questions about the integrity of the Husler Fund’s loan disbursement and recovery systems. Authorities are now under pressure to address these loopholes and ensure stricter oversight to prevent financial mismanagement in government-backed funds.

Stay updated for further developments on this story.