Kenya Gets $25m Loan From World Bank Despite Corruption Row

The World Bank yesterday approved a $25m loan to Kenya - earmarked for fighting corruption - despite an outcry over allegations that senior ministers had plotted to steal millions of dollars from the treasury.

The bank's country director, Colin Bruce, called on the government to discipline ministers accused of sleaze. But Britain's former high commissioner to Kenya, Sir Edward Clay, yesterday accused the lending institution of feeding "the pig of corruption".

Writing to the World Bank, Sir Edward said its loans of $120m (£68m) - which include trade and transport grants as well as money to fight graft - were being made as newspapers published details of an explosive dossier from the country's former anti-corruption czar, and made him "tear" his hair "in frustration and despair".

He said: "How can the World Bank be so insensitive and hapless to announce new loans to Kenya? ... they have added insult to injury by feeding the pig of corruption in Kenya when many Kenyans were beginning to hope they might smell the bacon beginning to fry."

Kenya's former anti-corruption czar, John Githongo, had alleged that the vice-president and three ministers were complicit in suspect public procurement contracts worth $700m. Mr Githongo, a former civil servant now in exile in Britain, claims Kenya's president, Mwai Kibaki, was aware of the suspect deals, in which millions of dollars are believed missing.

Paul Wolfowitz, the World Bank's president, has dubbed corruption the greatest evil facing the world since communism. Critics say, however, he has missed a chance to send a signal to African leaders.

Mwalimu Mati, executive director of Transparency International Kenya, the anti-corruption pressure group, said: "It's not the kind of thing that conforms with the World Bank's official stance of zero tolerance on corruption ... this will sound as if the corruption problem in Kenya is not being taken seriously by the World Bank."

Mr Wolfowitz said he was willing to withhold approval of loans to corrupt countries and was scrutinising two World Bank loans to Kenya.

Kenyan opposition parties meanwhile are calling for ministers facing corruption allegations to step aside. The government has refused to act until investigations are complete, accusing its critics of "lynch mob tactics".

Billow Kerrow, Kenya's shadow finance minister, said the World Bank needed to put more pressure on the government. "While I welcome the aid ... the World Bank will need to come out quite clearly and say that their money can only be disbursed after the president asks his ministers to step aside."

Opposition parties are urging President Kibaki to call fresh elections after claims by Mr Githongo that two ministers - who have denied corruption - urged him to call off his inquiries.