A group of well connected government officials and private individuals are believed to behind the theft of government funds through the eCitizen portal.
The portal which was built by Webmasters Kenya Limited at a cost of Ksh 70million through a world bank funded program, is now the subject of internal investigations at the Ministry of Finance.
According to well placed sources within the Office of the President, KRA, Safaricom and Treasury, the company behind the portal is believed to have conspired with individuals under the task force responsible for the portal to defraud the government money generated through the system.
The individuals behind the heist are said to be led by one Justus Nyamunga who heads the Digital Payment task force established through a gazette notice number 52 of 2014. Documents in pour possession clearly indicate that fictitious companies have been used as vehicles to transfer money from the eCitizen accounts to private accounts. Two prominent companies used in the illegal deals are Lexco Sevens and Goldrock Capital Limited. Another one is Webmasters Africa which is also owned by individuals behind Lexco Sevens and Webmasters Kenya.
According to the 2014 gazette notice, Mr Nyamunga was to head the task force as chairman assisted by the investment secretary while other members of the task force were drawn from the Office of the President, KRA, ICT Authority, CBK, KenTRADE, AG’s office and the judiciary.
Gazette notices establishing eCitizen and the task force to manage it;
While the program was still under pilot, Pesapal was contracted to conduct the pilot and find ways of integrating the portal with a payment gateway as Webmasters Kenya didn’t have such a technology. Pesapal pulled out when government officials started demanding that the Ksh50 which is charged over and above the cost of services as “convenience fees”, be channeled to private accounts.
Despite that the “convenience fees” is illegal as it has never been gazetted as required by law, it is being charged and used to enrich corrupt individuals who are managing the system.
The group demanding the “convenience fee” were led by Harry Mwangi who later worked his way around and became the head of the Digital Payment System. He was believed to be the face of the corrupt cabals at the ICT Authority which was then led by Paul Kukubo. Harry Mwangi, Victor Kyalo and Paul Kukubo were the same people behind the World Bank funded Pasha programmes which later failed after a Ksh3.5 billion investment on the same.
After the pull-out of Pesapal, Webmasters Kenya came up with a Payment gateway which is believed to have been registered and is owned by government officials led by one Sydney Wachira. The payment gateway is called Pesaflow and is owned by Sydney and other Ministry of Finance officials through a company called Lexco Sevens limited which is also substantially owned by Goldrock Capital Limited.
Transactions on the eCitizen portal;
To date, the government has collected more than Ksh 14billion through the eCitizen system in more than 8 million transactions. 6 million of the transactions were through M-Pesa incurring a convenience fee of Ksh 50 each (Ksh300 million in total) while more than two million of the transactions were through electronic cards (VISA and Mastercard) which were processed through US dollar. Convenience fee is pegged at $1 per transaction for card payments. That’s Ksh 200 million in the USD transactions.
When the eCitizen system was built, it was fully funded by the World Bank at a cost of Ksh 70million, with the government as the owner of the system meaning that all payments were to be channeled to Central Bank after processing.
Exchanges between Safaricom, Webmasters Africa and Goldrock Capital Limited over the management of the portal;
The individuals led by senior members of the task force are believed to have looted more than Ksh 300 million of the transaction fee charged through the system.
According to sources within the Finance Ministry, the group of individuals led by Chairman of the task force responsible for the implementation of the digital payment system Justus Nyamunga, Harry Mwangi (Director of Digital Payments) and Presidential Advisor on governance, Peter Kariuki, hatched a plan to loot the government funds which are being channeled through the eCitizen portal.
Ownership of Lexco Sevens and Webmasters Africa;
The exchange of letters between Safaricom, Webmasters Africa, Goldrock Capital and government officials shows that there is a problem in the management of money received through the eCitizen portal. Government officials have tried to keep this under wraps as it is feared that the opposition coalition might use these allegations for the political fight.