The anti-corruption group, Transparency International, has blasted the World Bank for loaning Kenya $25 million to fight corruption, following allegations implicating four senior ministers, including the vice president, in financial scandals.

The World Bank credit is to be used to strengthen checks and balances in budgeting procedures, financial management, and auditing in several key ministries of the Kenyan government.

The lead economist at the World Bank's Kenya office, Fred Kilby, explains.

"The thinking behind the credit is that there are many Kenyans in government, in the civil service, who would like to see that aspect of Kenya's anti-corruption plan strengthened," he said.  "We feel there is a strong commitment to reducing, [and] fighting corruption through the types of arrangements we are supporting under the credit."

But the executive director of Transparency International's Kenyan office, Mwalimu Mati, says the World Bank's timing is "insensitive and ironic," given the corruption allegations that have recently surfaced.

Kenyan media this week have been reporting alleged corruption cases sent earlier to President Mwai Kibaki from John Githongo, who was permanent secretary in charge of governance and ethics for about two years.  Githongo resigned last year and now lives in London.

Among the cases is the so-called Anglo Leasing affair, which involved the government awarding lucrative contracts to fictitious companies to print high-tech passports and build police forensic laboratories.

Kiraitu Murungi (file photo)

The scheme, which was prevented, could have cost the Kenyan economy around $200 million.  Vice President Moody Awori, Finance Minister David Mwiraria, Energy Minister Kiraitu Murungi, and former Transport Minister Chris Murungaru are among those alleged to be involved in the deal.

The World Bank's Kilby says that the scandal has eroded Kenyans' confidence in their government.  But he says that overall the government has made a significant effort to build up anti-corruption institutions and systems.

Transparency International's Mati says that the World Bank is sending out the wrong signals by giving the Kenyan government a loan at this time.

Davinder Lamba of Mazingira Institute, left, and Harun Ndubi of Kituo Cha Sheria protest the resignation of President Mwai Kibaki's top anti-corruption adviser John Githongo

"If what we are reading in Githongo's dossier is true, then yes, it [the loan] would be an endorsement of a government that is under serious suspicion of having tolerated or condoned grand corruption within its ranks," he said.  "And worse, still, it does not take into account Githongo's story.  Githongo is the first statehouse insider who has ever actually defected towards the public and told the public something they have never heard before, that there is corruption in the Kibaki government."

Many Kenyans say they are disillusioned with the current government, which was elected at the end of 2002 on a strong anti-corruption platform.