An investigation launched nearly two years ago to recover revenue worth Sh64 billion, suspected to have been lost through a misdeclaration of palm oil imports, has stalled, confirming the high cost of public-sector corruption.
Led by the National Assembly’s Finance and National Planning Committee, the inquiry went silent after key witnesses, including former top Kenya Revenue Authority (KRA) officials and corporate executives, failed to testify and nail the culprits.
The committee, chaired by Molo MP Kuria Kimani, has also alleged obstruction by National Treasury Cabinet Secretary John Mbadi. It started the investigation after receiving intelligence that the government was losing billions of shillings. The chairperson has accused CS Mbadi of failing to honour the committee’s invitation to provide information on the matter.
However, documents from the Parliamentary Budget Office show that the government lost Sh16.5 billion in revenue in 2022 from the misdeclaration of 233,000 metric tonnes of imported palm oil. In 2023, it suffered a further loss of Sh32.54 billion from 387,868 metric tonnes, and in 2024, Sh13.83 billion from 163,567 metric tonnes.
The Parliamentary Budget Office says the suspected fraud involved blending 60 per cent crude palm oil with 40 per cent refined palm oil and declaring it as crude palm oil to avoid higher duty. Refined edible palm oil attracts a 35 per cent import duty compared to 10 per cent for semi-refined palm oil.
This is suspected to be a large-scale tax evasion scheme at Mombasa Port, which violates the World Customs Organisation guidelines. The parliamentary inquiry centres on massive revenue leakages at the port, where refined or blended palm oil was allegedly declared as cheaper crude oil to dodge high import duties.
Delays in parliamentary investigations hamper public sector oversight and the likelihood of recovering the billions lost, and taxpayers continue to shoulder the burden of the high-level public sector fraud.
The possible cover-up of such cases only emboldens the corrupt operatives and frustrates the recovery of stolen public funds.