The latest UNCTAD report titled Economic Development in Africa Report 2020 ranked Kenya at position 24 globally among countries that record high illicit financial flows.
The report was presented by Secretary General of UNCTAD Mukhisa Kituyi at the end of September 2020.
This places Kenya ahead of Nigeria (34), Angola (35), Egypt (46), Mauritius (51), Cameroon (53) and South Africa (58).
'Dirty' money includes illegal practices such as tariff, duty and revenue offences, tax evasion, corporate offences, market manipulation and other selected practices.
However, the country also recorded the 2nd largest amount in returned stolen assets worth Ksh17 billion.
In December 2018, the United Nations General Assembly adopted a resolution on promotion of international cooperation to combat illicit financial flows and strengthen good practices on assets return to foster sustainable development.
However, Kenya continues to lose billions annually as officials, individuals, and corporations stash illegally acquired funds in highly secretive foreign banks abroad.
According to a report dubbed Illicit Financial Flows and Political Institutions in Kenya by Emmanuel Letete and Mare Sarr referenced in the latest UNCTAD report, Kenya has lost well over Ksh1 trillion in illicit financial flows since 1970, making it one of the worst, if not the worst offender among Africa’s non-resource endowed countries
It is estimated that Kenya has been losing an average of Ksh40 billion every year through illicit financial flows since 2011, as government, local firms and multinationals engage in fraudulent schemes to avoid tax payment.
In 2018, Kenya wrote to at least seven countries including Dubai seeking details of billions of shillings suspected to be stashed abroad by influential individuals, including politicians and businessmen.
This was after a damning report titled Dubai’s Role in Facilitating Corruption and Global Illicit Financial Flows was released.
It revealed that Kenya was among several African countries that could be losing huge amounts of tax revenue with investors capitalizing on Dubai’s attractive tax regime.
EACC and DCI confirmed that the office of the Attorney-General had reached out to the seven nations seeking information about bank accounts and assets in the names of Kenyan citizens, which are suspected to have been proceeds of corruption.
Earlier this year, Kenya's contribution to global financial secrecy worsened by dropping to position 24 globally from position 27 in 2018.
Kenya’s beneficial ownership law effected on March 1, is opaque giving room for hiding of identities for resource plunder and tax avoidance, according to Tax Justice Network Africa.
The lobby group ranked Kenya second in Africa in the latest Secrecy index.
In June 2019, the Central Bank of Kenya announced that the Ksh 1,000 note would cease to be a legal tender.
Kenyan authorities said scrapping the old note would be a way of ending the corruption. Billions of the high-denomination notes were suspected to be stashed away by corrupt officials, tax evaders and money launderers.
