EXPOSED: How Kenya Lost Over Ksh 6 Billion in Edible Oil Scandal

Kenya lost more than Ksh 6 billion in the edible oil scandal following missteps by the Kenya National Trading Corporation (KNTC). 

The Senate Standing Committee on Trade, Industrialization and Tourism on October 9, 2024, heard that taxpayers lost billions that are yet to be accounted for. 

Additionally, funds were paid to companies like Multi Commerce Company which received Ksh 2.2 billion and Charma Trade that got Ksh. 500 million under questionable circumstances. 

The committee ordered KNTC to recover the amounts lost, calling for those found culpable to be held accountable for their actions. 

Additionally, KNTC Acting Managing Director Peter Njoroge revealed that employees implicated in the scandal underwent disciplinary measures and most mangers dismissed.

“Following the internal audit report dated January 17, 2024, regarding the importation of essential commodities, anomalies were discovered and disciplinary process instituted that led to most managers being dismissed,” Njoroge explained. 

It was also revealed that the procurement of edible oil was denominated in US dollars, yet the procuring entity was Kenya, raising concerns among the committee members.

“Procurement in US dollars was unfortunate, and this had already been done by the former management.

However, progressively, the board has guided that future procurement should be done in Kenya shillings,” KNTC managing director added.

The Chairperson of the Committee Senator Seki Ole Kanar directed that the committee would advance the issue to an inquiry and to invite all the suppliers, the cabinet secretary, and the Directorate of Criminal Investigation (DCI) to give updates on when and who they have convicted or arrested on the matter.

Disconnect between KNTC and KEBS on Edible Oil Scandal 

In September 2024, it emerged that unfit cooking oil was already in circulation in the Kenyan market following mishaps at the Kenya Bureau of Standards (KEBS).

Speaking during a Trade and Industrialization Senate Committee hearing, KEBS Managing Director Esther Ngari revealed that 32 million litres of unapproved edible oil were released into the market even after failing required standard tests. 

Ngari told senators that even though KEBS wrote to KNTC to ship back or destroy the substandard oil, it did not have the power to stop the other 36 consignments of 32 million litres of cooking oil from being sold to Kenyans. 

However, during his submissions on October 8, 2024, Njoroge clarified that KNTC had not received any letter regarding the rejected sample of the edible cooking oil that was recommended for distraction by KEBS.

KNTC therefore sold all the edible oil and learnt from the response of KEBS to the senate that they had issued instruction to the corporation to reject, reship or destroy the specified consignment of the edible cooking oil.

Also Read: KEBS Clarifies Reports on Suspending 10 Cooking Oil Brands

On her part, nominated Senator Betty Montet expressed concern over the health risks posed by the condemned oil, pointing out that the focus should not only be on financial losses but also on potential health consequences.

Other Concerns the Committee Raised about KNTC 

Following the blunder at KNTC, the senate committee sought to know what structural changes were undertaken to streamline the operations at the corporation.

Also Read: Former KNTC Director Pamela Mutua Arrested Again

Njoroge stated that the recruitment process to replace dismissed managers was complete awaiting approval from the government.

“The recruitment process for managers is complete awaiting to be onboard with the new managing director, which is pending at the cabinet secretary’s office.

In line with austerity measures by the President, the Public Service Commission suspended all new and ongoing recruitment in the public service for the next one year.

The freeze on hirings is in compliance with the government’s directive to reduce the public wage bill to 35 per cent of the national budget,” he expounded.

Additionally, the committee called for accountability in the loss of billions of taxpayer money and action taken against individuals implicated in the case. 

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