A damning Special Audit Report by the Office of the Auditor General has lifted the lid on massive financial and governance irregularities within Kenya’s flagship digital payments platform, eCitizen, exposing the diversion of public funds, unauthorized fees, and murky platform ownership.
The audit reveals that funds collected via the official government Paybill number 222222—mandated for all digital payments to the state—were diverted to private accounts, in breach of established protocols. On January 25, 2024, four transactions totaling KSh127.85 million were made from the Paybill account to private entities instead of the designated government Settlement Account at KCB Bank, raising serious red flags over the integrity of the payment infrastructure.
Even more troubling is the revelation that an undisclosed and unauthorized account named “pesaflow” received substantial collections on behalf of the government. Bank statements from Equity Bank, obtained by the Auditor General, show the account received KSh68.7 million and USD 48,142,844—despite not being among the collection accounts approved by the National Treasury.
The report further uncovers the irregular collection of KSh1.81 billion and USD 3.3 million in “Convenience Fees” from the public. These charges, pegged at KSh50 or USD 1 per transaction, were imposed contrary to Gazette Notice No. 9290 of 2014, which required prorated nominal administrative fees. Shockingly, for nearly a decade, no prorating mechanism was ever developed, making these collections not only unlawful but potentially exploitative.
In a shocking twist, the audit also questions who really owns eCitizen.
Initially developed with support from the International Finance Corporation (IFC) and transferred to the National Treasury in 2017, the platform’s ownership somehow ended up with a private vendor—Webmasters Ltd—by January 2023. Despite the formal handover, the government has failed to gain full control of the platform, leaving key aspects of its operation in the hands of private interests.
The report highlights further gaps in accountability:
A staggering KSh2.57 billion in receipts held in the Settlement Account could not be linked to any invoices generated through the Pesaflow System.
A review of reports for the Tourism Fund showed that while the eCitizen system indicated KSh2.24 billion was due for transfer, the amount actually remitted totaled just KSh1.72 billion—a discrepancy of over KSh515 million.
The audit also reveals questionable vendor payments. As of June 30, 2024, the government had paid KSh492.1 million and USD 414,299.60 to Electronic Citizen Solutions Ltd, a company not listed as a party to the official contract between the ICT Authority and the vendor consortium (Webmasters Ltd, Pesaflow Ltd, and Olive Tree Media).
The revelations point to deep-rooted lapses in financial governance, platform transparency, and vendor accountability—posing serious risks to public finance and digital service delivery in Kenya.
Calls for a forensic investigation and a public inquiry are now mounting, as Kenyans demand answers on how a platform meant to streamline government payments has become a black hole for public funds.
