Corruption is costing Kenya as much as $1bn a year, which new anti-corruption measures will hopefully recoup to help provide better public services to Kenyans, the government believes.
The police force is said to be one of Kenya's most corrupt institutions
Despite rich natural resources, Kenya's growth has stagnated for years, with the economy expanding by just 1.1% in 2002, said Planning Minister Peter Anyang' Nyong'o.
Part of the reason was rampant corruption costing as much as 68bn shillings ($932m; £565m) a year - nearly a quarter of annual government spending, he said.
The reluctance of previous administrations to tackle corruption led to the suspension of international loans to Kenya, an obstacle which the new government of President Mwai Kibaki hopes to overcome.
In the meantime, government spending is set to increase in an effort to reduce poverty.
During former President Daniel arap Moi's 25-year rule, inflation stayed relatively low.
"That's the macroeconomic environment," said Mr Nyong'o, "but people can't eat the macro-economic environment."
16 times a month
Mr Kibaki, who succeeded Mr Moi in December, has introduced new anti-corruption measures, including the unceremonious sacking of every single government procurement chief earlier this week.
A survey carried out by the finance ministry "established that there is a serious and widespread abuse of office by officers charged with this responsibility", Finance Minister David Mwiraria said in a statement.
Most procurement officers, he said, owned companies which won government contracts but never - or only partially - produced the goods and services for which they had already been paid.
Kenya is generally seen as one of the most corrupt countries on the planet, ranking 96th of 102 in the 2002 Corruption Perceptions Index developed by pressure group Transparency International.
Its "Daily Bribery Survey" suggested that Kenyans pay on average 16 bribes a month, simply to get on with their ordinary lives.
Transparency's Kenya chapter head, John Githongo, has been placed in charge of anti-corruption efforts.