State gears up to shut down all manual payment systems

ICT Cabinet Secretary Fred Matiang’i. The new payments system will help track Government transactions electronically — thereby helping to seal loopholes for revenue losses in the public sector. [PHOTO: FILE/STANDARD]

By JAMES ANYANZWA

NAIROBI, KENYA: All manual Government payments will be phased out in the next three weeks. Cabinet Secretary for Information, Communication and Technology Fred Matiang’i Wednesday said preparations have been made for the Government to officially switch to electronic payments by next month (April 2).

Dr Matiang’i said the National Treasury would be publishing regulations to operationalise the Public Payment Act before the electronic payment system goes live.

The move is an attempt to improve accountability, efficiency and transparency in Government transactions and prevent revenue leaks. The system is a result of President Uhuru Kenyatta’s directive to seal all loopholes through which Government revenues are lost.

“The Government has done so much in terms of digitising its payment system. What we want to do now is to ensure that this process is institutionalised.”

Matiang’i said the new payments system would help track Government transactions electronically – thereby helping seal loopholes for revenue losses in the public sector.

“This platform will move the Government further from the use of cash payments and help minimise cases of abuse of public resources,” Matiang’i said.

According to the Auditor General, Government ministries and departments failed to account for over Sh338 billion of the total Government spending for the 2011-2012 fiscal year.

The Auditor General noted that an additional expenditure of Sh561 billion was not supported by adequate documents – demonstrating the extent of waste in the public sector.

The Government’s watchdog institution revealed that only six per cent (Sh55.2 billion) of the Sh920 billion that the Government spent during the financial year was fully accounted for.

FRAUDULENT EXPENDITURE

A third of the 252 financial statements of institutions audited were either deliberately misstated or revealed fraudulent expenditure, according to the Auditor General.

The auditor singled out malpractices in Government as absence of proof of payment, over-expenditure, unpaid bills and unaccounted for imprests by Government employees. According to the Auditor General, five Government ministries spent Sh7 billion without parliamentary approval under recurrent expenditure. The move to introduce cashless payments within Government circles is widely expected to arrest these cases of corruption, enhance efficiency and hasten the payment processes within the public sector.

“The time has come to make hard decisions in order to inculcate ICT in the governance of our country,” said Matiang’i.  Electronic payments have been proven to boost economic growth, while advancing financial inclusion. Many countries around the world are working towards making their payment systems less dependent on cash.

In Africa, Kenya ranks second after South Africa among countries that have significantly adopted cashless payments system, according to a survey by MasterCard Advisors.

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