Category Archives: Kenya parliament

Kenya Political Party Financing in 2019

What’s to be learnt about the state of political party finance in Kenya? Some parties have published their unofficial financial results for the year 2019.

Jubilee: The ruling party has income of  Kshs 339 million, that includes 240 million from the Political Parties Fund (PPF) and 98 million from members. They spent 80 million on rent, down from 90 million, 173M on general  expenses and 81 million on secretariat staff and executives.  They have 16 million of property

ODM: The main opposition party received Kshs 112 million from the Political Parties Fund, same as last year, and donations of 78M. They have also booked an astronomical accrued amount from the government of Kshs 6.47 billion. They spent 170 million on administrative expenses, 19M on campaigns, 11M on party policy, 10M on conferences, 3M on branch coordination and just 712,000 on civic education. The amount they are claiming for the government is also listed as a current asset and bumps up their balance sheet from 119 million last year, to 6.5 billion.

Other Parties: Meanwhile other parties have been silent on their finances, but are active in other areas. These include the former ruling party – Party of National Unity, which has changed its officials. New parties have been formed this year  include  Transformation National Alliance Party of Kenya (TNAP) with “money bills” as its party symbol, the Democratic Action Party Kenya and the National Ordinary People Empowerment Union (NOPEU).

Summary of results:

1. Party coalitions are dead:  The party coalitions put together for elections appear to have fallen apart. ODM has stopped making payments to its coalition partners and no longer provides for them as they did in their earlier accounts.

2 Expensive secretariats: The amount at Jubilee of 81M  is down from 141M last year and which was a sharp rise from 28M in the previous year. That may coincide with hiring for the 2017 election period. Usually, party activities go into a lull after elections, until the next election cycle. In Kenya, this is set for 2022 unless another constitutional referendum is engineered to happen before that by political leaders.  At ODM, their property assets went up from 8M to 185M. in September 2019 they relocated their headquarters from Orange house to Chungwa House ay Loiyangalani  Drive in Lavington.

Old Pic from the State House FB page

3. Parties IPO: ODM has sued the government for not paying it the amount of Kshs 6.4 billion which it says dates back to when parliament came up with the  political parties act.   

But the National Treasury has been saying it cannot afford  to fund the political parties to the tune of 0.3% of the budget as parliamentarians had their parties, without impeding their constitutional requirement  to also fund the county governments.  Treasury has been allocating Kshs 300 million instead of 3.6 billion a year to the Political Parties Fund.

4. If that payment ever materializes, ODM’s coalition partners, have stated that they will stake a claim for a slice of that windfall. 

Sports betting on ice as Sportpesa and Betin shut down in Kenya

On the last Saturday of September 2019, top sports betting companies, Sportpesa and Betin, separately announced an effective end of their operations in Kenya.

Sportpesa posted a statement on their site saying that Kenyan tax administrators had misunderstood revenue generation in the betting industry  – and that the company would halt all brand operations in Kenya as a result. Earlier, Sportpesa management, without citing  numbers, had said that they had settled all matters with Kenya Revenue Authority (KRA), but have still been unable to obtain renewal of their license from the Betting Control and Licensing Board (BCLB)

Then last week on Wednesday, Sportpesa moved to lay off about 400 employees.

Meanwhile, Gamcode (trading as Betin Kenya) also issued a memo to all employees terminating their jobs as the company had not been operating since July 2019. They said they had been trying to resolve for three month’s as such all jobs would end on October 31.

Betin had several big media campaigns with Kenyan soccer star McDonald Mariga, who has unexpectedly stepped into politics and is now in the middle of campaigns to take up the vacant Parliamentary seat for Kibra constituency, following the death of popular MP, Ken Okoth.

By now, with the English Premier League on, local sports pages would have full-page colour advertisements of weekend and mid-week match betting odds and jackpot opportunities. Sportpesa also had significant spending in Europe sponsoring the Racing Point Formula One  team and Everton in the UK premier league and those teams still adorn  Sportpesa brands.

The claims of banning sports betting have been varied, with their destructive influence on young Kenyans, tax evasion and money laundering at different forums. Even a former Chairman of the Betting Control and Licensing Board, Kimani Kung’u, questioned whether non-payment and non-compliance with taxes was behind the freeze on the top betting companies.

In an interview with Radio Jambo in July, Kung’u said that the revenue of betting companies at the end of 2018 was between Sh20 billion and Sh25 billion and that there is no way that could have risen to Sh200 billion by mid-2019.


There have been three groups of companies: The group of 26 companies that were banned in July 2019 included: Mozzartbet, Sportybet SportPesa (Pevans E A Ltd), Betyetu (Oxygen & Gaming EA Ltd), Betin (Gamcode Ltd), Betway (Blue Jay Ltd), Easibet (Dreamcall Ltd), Betpawa (Gaming International Ltd), Betboss (White Rhino Ventures Ltd), Elitebet (Seal Capital Ltd), Dafa bet (Asian Betting & Gaming Ltd), Lucky 2 U, Cheza Cash (Sekunde Technologies), Palmsbet (Advanced Innovation Ltd), 1X Bet (Advanced Gaming Ltd), Saharabet (Sahara Game Technology Ltd), Bungabet (Galaxy Betting Ltd), Kick Off (Kick Off Sports Bar Ltd), Kenya Sports Bet, Eastleighbet (G&P Trading), and Premier Bet Ltd.

Those reportedly cleared later by KRA in July 2019 include Mozoltbet, East bet,  Lucky 2u, Eazi Bet, Kick off, Eastleighbet, Palms Bet, Bet boss, Betway, OdiBets, Mozzartbet and Ken Bookmakers.

Those xleared in August 2019 include Oyster, CityBet/EAF Galaxy, Shop & Deliver, Kareco, Playco, GrayHoldings/GameCo/Shabiki, NZ Mobile, Cheza Gaming, Hanstaunton Technologies/LottoCoLLP, and Zumabdu/Betlion.

None of the relicensed firms appears, so far, to have the impact and reach of Betin and Sportpesa.

Winners from the shutdown:

  • Moses Kemibaro has done a nice piece about the impact that the ban on Sportpesa and Betin has had on their web traffic and that of the other companies that have come to benefit from new betting activities, including Betika. He writes that “The biggest winners from Kenya’s sports betting armageddon are undoubtedly Betika, Odibets, MozzartBet Kenya and Kwikbet Kenya who have grown massively in terms of audiences and traffic during the last couple of months.”
  • The Internal Security Minister has said that Kshs 200 billion that was previously leaving the country through sports betting firms, is now being spent locally, boosting the local economy.

Losers from the shutdown include:

  • Media companies and newspapers: Gambling companies were among the top advertising spenders in the country up till this year. They would have about two color pages in all the newspapers, radio & TV ads, and several billboards across town. But as of this weekend, the newspapers are devoid of the advertisements except for small ones by Mozzartbet (for a 10 million jackpot for 50 shillings) and Betika (register and bet via USSD, with no data bundle required for a 100 million jackpot for 49 shillings)
  • The Kenya Premier League, which is limping since it lacks a top sponsor. Sportpesa had stepped in after Supersport had pulled out in protest at an ill-advised decision by the league to increase the number of participating teams from 16 to 18.
  • Telcos: Bettors and betting companies generated messages with every bet that incurred fees and bets were settled by mobile money payments. While companies are considering cards as a payment option, that is a minority that lags compared to mobile money usage.

EDIT Oct 11: 

Betin Kenya released a statement, saying that they, as a company, were fully tax-compliant, and that the betting industry had collectively paid Kshs 10 billon ($100 million) in taxes in 2018, but that the government had refused to renew its license, causing it to lay off its staff and shut down its retail outlets.

Mortgage Refinance and Amendments to The CBK Act, 1966

Via a legal alert from Oraro & Company Advocates: The Finance Act, 2018 which was assented to on September 21, 2018, amended the Central Bank of Kenya (CBK) Act, 1966 to regulate Mortgage Finance Businesses (the business). The amendments include having new definitions and the introduction of new powers to the CBK. These amendments came into effect on 1st October, 2018.

New Definitions

  • A Mortgage Refinance Business is defined as the business of providing long-term financing to primary mortgage lenders for housing finance and any other activity that the bank may prescribe from time to time;
  • Mortgage Refinance Company means a non deposit-taking company established under the Companies Act of 2015 and licensed by the CBK to conduct mortgage refinance business;
  • Specified Mortgage Refinance Company means a licensed mortgage refinance company licensed under the CBK Act.

Increased CBK powers

With the introduction of new sections, CBK will now have the power to license and supervise the business. This includes:

  • Determining capital adequacy requirements;
  • Prescribe minimum liquidity requirements and permissible investments for the business;
  • Supervise the business by conducting both on and off-site supervision;
  • Assess the professional capacities of persons managing the business;
  • Approving the board management of the business;
  • Approving the appointment of external auditors;
  • Collecting regular data from the business;
  • Approving the annual audited accounts of the business before publication and presentation at the AGM;
  • Revoke or suspend a license;
  • Receiving reports from the Mortgage Refinance Business.

These are extracts from other documents from Oraro & Company with detailed implications of the passing and presidential assent of the Finance Bill 2018.

Kenya’s Money in the Past: TJRC

From reading the introduction to a new book (available on Amazon) by Ronald C. Slye,  a Commissioner with the defunct Kenya Truth, Justice, and Reconciliation Commission, he narrates how the Commission evolved and troubles it encountered as it sought to carry out  investigations, through to completing its report and handing it over to Kenya’s President. These included accusations again their Commission Chairman and delays to the release of their report so it did not clash with the 2012-13 Kenya electioneering period as well as demands that some clauses be deleted from the final report.

The foreword of the book written by Reverend Desmond Tutu is also available and he gives some more background to the Commission and Slye’s writing. Tutu writes that the Kenya Government did not support the report, and printed as few of them as possible and Parliament has not debated the TJRC report.

In a chapter, available online, Slye explains how he came to join the Commission and some to the things he went through. He thanks his university, the Seattle University School of Law,  for making the complete TJRC report, in sectors and versions, available online on its website as well as also hosting supporting documents that he researched as the basis for his book.

In terms of finance and budgets, there were allegations against that the commission was a waster of public funds and Slye has dedicated a separate page called “Financial Scandals” that contains documents and correspondence on the financial affairs of the Commission. .. includes the letters written by the Commission to the relevant Parliamentary Committee’s requesting an investigation into the handling of the Commission’s finances by the Ministry of Justice. It also includes the only document the Commission received from the Ministry of Justice in response to our inquiry concerning how our monies were being spent.

Excerpts from the documents;

  • The Commission, while independent, never really had control of its monies which was stipulated in the TJRC act; that was done by the (Justice) Ministry. The Ministry also communicated that the Commission would have no control of funds until much later.
  • Some trips Commissioners made e.g to hear facts at the Kenya Coast were paid for out of their pockets but were never reimbursed. Nor did they get reimbursed for some medical expenses, some local travel which were done out-of-pocket, as well as for moving expenses of foreign Commissioners.
  • Money was spent on their behalf for activities which the Commissioners were not aware of e.g. Kshs 16 million to host a “council of elders.”

TJRC financial report from the Justice Ministry

  • In October 2009,  the Ministry sent three different sets of papers to JTRC purporting to give a breakdown of usage of their funds and Slye writes that it included bulk payment for Ministry of Justice retreats and bulk payments for unidentified casual workers when the Commission had just a CEO and two consultants
  • In December 2009, the TJRC submitted a two-year budget request for Kshs 2.06 billion. It also submitted a supplementary request for Kshs 631 million. When no answer was received, it wrote, in January 2010, requesting for a lower amount Kshs 480 million. In March 2010, the Ministry wrote that, of this request, they had been allocated Kshs 30 million in the budget for the rest of the fiscal year. The Commissioners soldiered on and decided to pursue alternative means of funding.
  • The page also contains a press release the Commissioner put out that stated:  “The TJRC would like to emphasise the need for financial independence and to restate that at no time has the TJRC had control over any finances. The Ministry, which has seconded one of its finance officers to the Commission, controls all and every aspect of our budget.”

In July 2011 the Commission was accused of corruption through media reports. Slye writes that internal investigations concluded there was no foundation. In their first year (2009-10), their budget was controlled by the Ministry and they had no control of finances till their second financial year. They lacked financial independence, they had to seek Ministry approval of all activities (delayed processes), and had no authority to approve /disapprove expenditure incurred by the Ministry on behalf of TJRC with no knowledge the ministry expenditure beforehand and they were not given a true account of expenditure in the first year. 

During their second year (2010-11), they ran low on funds and had to seek advances from the Treasury for 44 million and 80 million from the Ministry of Justice. They requested supplementary funding which never came which allowed hearing in Mount Elgon, Upper Eastern and North Eastern. Eventually, 650 million of the 1.2 billion was released. There were recurrent delays, payments came in tranches, they had to seek loans, and were only able to visit two provinces and hold public hearings.

Office of the Auditor General (OAG): 

Meanwhile, the Office of the Auditor General of Kenya mentions the TJRC in some reports:

  • In the report for 2010/2011, reference was made to the Commission’s failure to deduct Pay As You Earn (PAYE) from the salaries of 304 statement takers totalling Kshs.13,077,033. A review of the position during the year under review revealed that no attempt was made to recover the amount.
  • The statement of financial position of the Truth, Justice and Reconciliation Commission (TJRC) lacked opening balances. Further, the statement of management responsibilities was not signed by the officials as required. The whole financial statements were not dated and the necessary supporting documents and schedules including cash books and government ledgers, were not provided for audit review.
  • Although notes to the financial statements were provided, they were poorly numbered and arranged such that it was not easy to follow the financial statements. The financial statements also lacked numbered pages and headings.
  • In the circumstance, the accuracy and completeness of the financial statements could not be ascertained.
  • With regard to truth, justice and reconciliation activities, the Ministry reported to the OAG that it had facilitated the enactment of the Truth, Justice and Reconciliation Act, 2008 and the appointment of the TJRC Commissioners. 

Kenya Finance Bill 2018

In a year in which there were crucial changes proposed to Kenya’s tax system, the National Assembly passed the Finance Bill 2018, but the President refused to assent to it and sent it back to Parliament with his proposed amendments to fuel, banking, housing, gambling and other taxes.

Sectors affected by the memorandum.

  • Banking: For every transaction your bank charges you, currently there is a 10% levy which will now go up to 20%. Also, the fee on money transfer and mobile banking services will be 20% on excisable value – up from a proposed 12.5%.
  • Telecommunications: a tax on telephone and Internet services will be 20%, up from an earlier 15% tax on the excisable value
  •  Food: He proposed reinstating a sugar confectionery tax that parliament had dropped.
  • Fuel; Kerosene will cost the same as diesel after the introduction of an anti-adulteration tax. VAT which Parliament had pushed back by another two years, and which the President wrote would cause a Kshs 35 billion shortfall in this year’s budget. He, therefore, proposed an immediate reinstatement of VAT at 8%. (VAT in the country is levied at 16% for all other goods and services that qualify).
  • Housing: Employers shall pay a new housing development levy on behalf of employees – with the employer’s contribution at 1.5% of salary and the employees at 1.5% of salary – up to a maximum of Kshs 5,000 – to be remitted on the 9th of the following month to the proposed National Housing Development Fund.

Employees who don’t qualify for the low-cost housing proposed will still have their money go to the Housing Development Fund and will get it back when they retire,

  • Gambling: tax reduced from 35% to 15%.

The President also asked Parliament to reduce the national government budget by Kshs 55 billion. Parliament was on a month-long recess but has resumed this week for special sitting sessions relating to the Finance Bill 2018. They received the President’s memorandum on Tuesday 18th September, with the budget committee meeting on Wednesday to review and approve these changes for Parliament to vote on Thursday 20th September.