MPs block Kenya anti-corruption plan

President Moi had urged MPs to support the bill

The Kenyan Government has suffered a humiliating defeat after members of parliament threw out a crucial anti-corruption bill.

If passed, the bill would have led to the establishment of an anti-corruption authority.

This was one of the key conditions before the International Monetary Fund would agree to release an estimated $20m of aid.

But opposition MPs opposed the bill, saying it would not reduce corruption in Kenya.

Faltering economy

So close was the vote that President Daniel arap Moi put his political prestige on the line by taking the unprecedented step of coming to parliament to vote.

He argued that if the bill failed, Kenyans would be pushed into deeper poverty.

But in the end, the 130 votes in favour of the bill fell short of the 145 needed to pass the constitutional amendment.

Kenyans could be pushed into deeper poverty, President Moi warns

Standard Chartered economist Razia Khan, said: "Rejection will effectively rule out any IMF lending.

"The concern is if the IMF won't lend to Kenya this year there is going to be upward pressure on interest rates because of funding difficulties."

The country badly needs international help as its economy is faltering and unemployment is rising.

Kenya regularly is ranked among the most corrupt countries in the world.

But the last anti-corruption body was effectively dismantled in December, after its powers to prosecute were declared illegal by Kenya's constitutional court.

What we don't want is a lame duck anti-corruption authority

Opposition Democratic Party

And an anti-corruption bill and a code of ethics bill, promised for the last parliament, were never passed.

The bill cannot be debated again for six months.

The largest opposition party, the Democratic Party, argued that the authority resulting from this legislation would be too weak to make a difference.

Democratic Party shadow attorney-general Kiraitu Murungi, said: "What we don't want is a lame duck Kenya Anti-Corruption Authority (Kaca), a Kaca that will be shrouded in constitutional and legal problems."

The opposition also argued the new bill would create a conflict between the head of Kaca and the attorney-general because the latter would retain the power to prosecute cases of corruption.

Crackdown blow

"We need International Monetary Fund money, the government knows this and should prepare proper bills," said Peter Anyang' Nyong'o, head of the political bureau at the opposition Social Democratic Party of Kenya.

Dr Richard Leakey: Stood down

Conservationist Richard Leakey was appointed head of the notoriously corrupt Kenyan civil service in 1999.

His appointment after years of opposition to President Moi was seen as a sign to international donors that Kenya was serious about cracking down on rampant corruption.

Dr Leakey said at the time he was confident he could wipe out government corruption.

But he stood down in March this year amid speculation that he was carrying out his brief too diligently and had offended some senior people.

$10bn 'missing'

The IMF suspended lending to Kenya late last year complaining the government was backtracking on efforts to fight official corruption.

A parliamentary report in Kenya recently revealed that $10bn of public funds went missing during the course of one year.

The report - by the Public Accounts Committee - said that during 1994-95 the money was either lost or uncollected by the departments responsible.

The missing money included funds from the Central Bank, the state-run post and telecommunications corporation and Kenya Railways.