Senior officials at the Kenya National Trading Corporation are facing serious questions over their controversial decision to award a lucrative Sh14.8 billion rice import contract to four companies that were not part of the original tender process, effectively sidelining 16 firms that had already been notified of their successful bids.
The scandal has cast a fresh shadow over KNTC barely a year after former Chief Executive Pamela Mutua was dismissed following a procurement scandal that led to criminal charges.
Adding to the controversy is the fact that the current CEO, Lucy Anangwe, was herself recently promoted despite being implicated in a separate Sh6.5 billion edible oil scandal and having ongoing disciplinary proceedings against her.
The current rice import controversy involves the importation of 250,000 tonnes of grade one white Pakistani rice, with each metric tonne valued at $460 (Sh59,409).
Sources within the corporation reveal that on September 9, KNTC sent official communication to 16 companies informing them they had successfully bid for the rice import quota and instructing them to proceed with importation procedures through the Agriculture, Food and Fisheries Authority procurement portal.
However, in a dramatic turn of events the following day, KNTC officials made phone calls to the same 16 firms, informing them that the corporation had decided to “go a different route.”
The beneficiaries of this sudden change were four companies – Zyan Agencies, Ecoview Commodities, Njema Commodities, and Solid Commodities – none of which were among the original 60 companies from which KNTC was supposed to select.
Anangwe’s Controversial Leadership
The rice import irregularities have raised fresh concerns about the leadership of KNTC under Anangwe, whose appointment as Managing Director in November 2024 was itself mired in controversy.
The then Trade Cabinet Secretary Salim Mvurya allegedly influenced her promotion despite advice from the then KNTC Board Chairman Hussein Debasso against the appointment.
Debasso had warned Mvurya in a November 6, 2024 letter that Anangwe was subject to ongoing investigations by the Ethics and Anti-Corruption Commission and the Directorate of Criminal Investigations regarding the edible oil scandal.
She had also been mentioned adversely in Auditor-General Nancy Gathungu’s special audit report dated July 29, 2024.
“Please note that the officer was involved in the execution of the irregular bank payments since she was signatory to the bank accounts,” Debasso had warned Mvurya, referring to Sh10.72 million in irregular payments disguised as handling fees when Anangwe served as head of finance and accounts manager.
Despite these warnings, Principal Secretary Alfred K’Ombudo was dispatched to KNTC premises to expedite Anangwe’s appointment, calling an urgent board meeting at 4pm on November 6, 2024, without the board chairman’s involvement.
Pattern of Questionable Deals
Corporate records reveal intriguing details about the newly favoured rice import firms.
Zyan Agencies, incorporated on November 30, 2018, is wholly owned by Ibrahim Murie Ibrahim and operates from an undisclosed building along Nairobi’s Standard Street.
When contacted using the phone number listed in Business Registration Service records, a woman who answered denied knowing either Ibrahim or the company.
Njema Commodities, incorporated on May 31, 2021, is owned by Abdinasir Siyad Mahamud (70 percent) and Muhudin Ibrahim Hassan (30 percent). Despite multiple attempts to reach him, Mahamud has remained evasive about his company’s involvement in the deal.
Most remarkably, Solid Commodities, owned entirely by Haroon Omar Bachoo, was only incorporated on October 29, 2024 – raising serious questions about how such a young company secured a contract worth billions of shillings under Anangwe’s leadership.
The rice import tender was initiated following a High Court ruling by Justice Edward Mureithi, who allowed KNTC to import the rice after former Principal Secretary Irungu Nyakera’s Farmers Party challenged the original gazette notice.
Justice Mureithi’s ruling on August 19 reduced the originally proposed import quantities to 250,000 tonnes and set an October 31 deadline.
The controversy has been compounded by revelations that KNTC dismissed lobbying efforts by the Pakistan High Commission, which had written to Anangwe seeking preferential treatment for Islamabad-registered firms.
In a September 12 letter, Pakistani officials requested “favourable consideration in granting preferential treatment for the allocation of rice imports.”
Marsabit Senator Mohamed Chute has been particularly vocal about the irregularities, questioning why Anangwe and other officials implicated in the edible oil scandal remain in office while their colleagues have been dismissed.
He has alleged evidence tampering and called for the officials to step aside during investigations.
Historical Context of Corruption
This latest scandal comes against the backdrop of KNTC’s troubled recent history.
The previous rice import programme saw Mutua and other officials charged with procurement law violations after investigations revealed that contracts worth Sh6.85 billion were awarded to politically connected individuals, including companies owned by Athi Water Works Development Agency Board chair Mary Wambui Mungai.
The edible oil scandal under Anangwe’s watch involved Environpro Kenya Limited and other companies, with KNTC admitting to losing Sh6.6 billion through corrupt practices.
Some consignments were allegedly sold at Sh3,028 per jerrican instead of the intended Sh3,700, resulting in losses of Sh540 million.
KNTC’s decision to bypass its established procurement process could expose the corporation to costly legal challenges.
The 16 firms that were initially notified of their successful bids may seek compensation through the courts, potentially costing taxpayers millions in damages.
Kenya typically imports nearly 800,000 tonnes of rice annually to bridge its domestic production deficit, making the rice import programme crucial for food security.
However, the pattern of controversies surrounding these deals suggests that what should be a straightforward food security measure has become a vehicle for questionable enrichment.
The waiving of import duties for the current deal, described as an “annual ritual,” was intended to keep rice prices affordable for consumers. However, the lack of transparency in contractor selection undermines public confidence in the programme’s integrity.
Neither Anangwe, CS Mvurya, nor Board Chairman Evans Kidero responded to repeated attempts to reach them for comment on the rice import controversy.
Their silence has only intensified speculation about the decision-making process that led to the handpicking of the four companies.
The Senate’s Justice, Legal Affairs and Human Rights Committee is now investigating the retention of staff allegedly involved in the edible oil scandal, including Anangwe, senior accountant Edward Wachira, and finance officer Lydia Karue.
The Sh14.8 billion rice import deal represents more than just a procurement controversy – it highlights the systemic problems plaguing Kenya’s food security programmes.
With Anangwe’s controversial past and the current irregularities, KNTC appears to have become a conduit for private enrichment rather than serving the public interest.
As investigations continue, the pattern of questionable appointments and procurement decisions at KNTC suggests that comprehensive institutional reforms are urgently needed to restore public confidence in Kenya’s strategic food import programmes.
