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US suspends health funds to Kenya, forces closure of Tanzanian bank

International
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Johannesburg – The United States has suspended some of its funding to Kenya's health ministry over corruption allegations and weak accounting procedures. In another development, Washington also forced the closure of one of Tanzania's largest banking institutions, FBME, on the grounds that the institution was aiding and financing terrorism.

The BBC has reported that the US State Department has suspended $21m in aid to the Kenyan health ministry after the department accused the ministry of corruption. The department released a statement explaining that the move was designed to ensure that the healthcare reached those in need, in addition to protecting US taxpayer money.

The statement added that support for life-saving and essential health services would not be affected. USAID earlier in the week said it supported the suspension of the aid which went towards covering salaries, wages and travel expenses. The American Ambassador to Kenya Bob Godec added that the halt in aid was not related to Kenya's general election in August and that relations between Nairobi and Washington were still good.

Furthermore, the amounted deducted amounted to only a small portion of the overall health investment given to the East African country which exceeds $650m annually. Nairobi responded by saying it was strengthening its auditing of the funds and the two countries are expected to work together on the upgrading of accounting procedures and once this was finalised, the restoration of the funding would follow.

However, this was not the first time the Kenyan government, nor the health ministry, have been accused of corruption. Allegations surfaced in 2016 of the health ministry misappropriating $50m after it rewarded contracts to politically-connected business people for inflated amounts.

Meanwhile, in neighbouring Tanzania, a statement released by the country's central bank said it had revoked the licence of FBME after the US, among others, accused it of money laundering and facilitating the payment of thousands of dollars from a financier of the Lebanese Hezbollah resistance organisation.


In its defence, the bank said it had boosted anti-money laundering measures, the BBC reported. FBME moved its headquarters to Tanzania in 2003 after originally setting up its headquarters in Cyprus. The US Treasury's Financial Crimes Enforcement Network (FinCEN) made the original accusations of the links with Hezbollah.

Following the allegations, FBME was placed under the management of Tanzania's central bank in 2014. However, the bank challenged the allegations and took legal action, saying that it had complied with regulations. A US court, however, ruled in favour of FinCEN in April, allowing it to shut the bank out of accessing the US financial system.

- African News Agency (ANA)
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