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President William Ruto during a Presidential Roundtable with the Kenya Private Sector at Emara Ole-Sereni Hotel in Nairobi on August 6, 2025
The government has imposed price ceilings on all items supplied to State corporations in a bid to curb cost inflation and seal procurement loopholes.
As part of its new e-procurement system, it will be conducting market surveys periodically to capture prices of various items to be bought by various state bodies, including county governments. These charges will then be locked in the system.
Joel Bett, programme coordinator for the Public Financial Management Reforms Secretariat (PFMR), which is under the National Treasury, said as part of the end-to-end digitisation of government procurement, a market survey on prices for every item will be conducted periodically.
The secretariat is responsible for overseeing, coordinating, and driving reforms in how public money is managed across government institutions.
“They (prices of these items) will be put in the system. So, if this pen is to cost in the market, let us say Sh100, any procurement person cannot go beyond that price. The system will not take it,” said Bett.
Under manual purchase system, prices for commonly sourced goods and services were already standardised through procurement guidelines and market surveys conducted by the Public Procurement Regulatory Authority (PPRA).
These standard rates were meant to guide procuring entities and prevent price inflation. However, in practice, the guidelines were flouted by procurement officers and suppliers, who colluded to inflate costs.
Kenyans have long been treated to shocking procurement scandals where common items were supplied at grossly exaggerated prices. For instance, a single wheelbarrow was purchased at Sh109,000 by a county government, condoms were priced at Sh32,000 per dispenser, and a television set meant for a youth programme was procured for Sh1.7 million. Even simple items such as pens and reams of paper have been inflated up to four times their market value.
The government’s new electronic procurement system officially went live in July 2025, marking a major shift in how public entities conduct purchases and award tenders.
The roll-out follows a directive issued by President William Ruto earlier in the year, aimed at enhancing transparency, curbing corruption, and ending cost inflation in public procurement.
Some of the over-pricing Bett said, has been attributed to suppliers locking in the time value of money, with many going for years without getting paid.
But the National Treasury reckons with the new digitised procurement system—which will be backed by automated exchequer releases— will solve the problem of erosion of time value for money.
Prices have always been standardised under the current manual procurement system, but this has always been flouted through human intervention.
But with the new electronic system, placing a higher price than the one in the system will automatically be rejected.
More of the government’s spending, over 60 percent, is on procuring goods and services. However, there has been a lot of waste in procurement, with prices of items being inflated due to inefficiencies and corruption.
This chronic overpricing has dramatically increased government expenditure, narrowing the country’s fiscal space and leaving fewer resources for essential services.
Key sectors like healthcare and education have often suffered budget cuts or delayed disbursements as bloated procurement bills consume a disproportionate share of the national budget.
