Stakeholders in Kenya’s financial sector are urging the government to join the Extractive Industry Transparency Initiative (EITI) as part of broader efforts to delist the country from the Financial Action Task Force (FATF) grey list.
Membership in EITI, which advocates for transparency in the extractive industry—including disclosure of beneficial ownership—could help stem the flow of illicit financial activities that have plagued the sector and contributed to the grey listing.
The extractive industry, particularly mining, remains a hotspot for illicit financial flows (IFFs), where communities rarely benefit from the resources around them.
Continued absence
According to James Kinyua, a Project Officer in Public Finance Management at Transparency International, Kenya’s continued absence from EITI places it behind regional peers like Tanzania and Uganda, both of which joined the initiative years ago.
Speaking during a recent training for financial journalists, he emphasised that EITI compliance is a viable route out of grey listing, which continues to erode investor confidence.
“The fact that we are not part of EITI is discouraging. It limits transparency, drives away investors, and hampers economic recovery,” said Kinyua.
He noted that although the Kenyan shilling remains one of the region’s top-performing currencies, the grey listing undermines its appeal to international investors.
Kenya was placed on the FATF grey list in 2024 for failing to meet anti-money laundering and counter-terrorism financing standards.
Despite receiving 14 recommendations from FATF, the country has made little progress, with critics pointing to a lack of political will and vested interests in maintaining the status quo.
To join EITI, Kenya must make a public commitment from the highest office, engage civil society, the extractive industry, and communities, and develop an implementation plan.
Transparency International also notes that declared mineral exports often understate their true market value, further fuelling IFFs.
Joining EITI could improve investor confidence, increase job opportunities, and support economic growth through responsible and transparent resource management.
A report, published jointly by Flywheel Advisory and the Financial Reporting Centre (FRC) and released early this year identifies immediate regulatory interventions—especially around virtual assets—as critical steps toward Kenya’s removal from the Financial Action Task Force (FATF) Grey List.
