3 December 2010 Last updated at 17:10 GMT
Corruption has long plagued Kenyan politics, causing widespread public anger
They said individuals were taking huge sums meant for development projects.
Analysts say many Kenyans will be surprised not by the news of the losses, but by the fact the admission has come from such senior officials.
Kitu kidogo - the Swahili for "something small" - is how the kickbacks are commonly described in Kenya.
Taking 10% of an awarded tender or inflating project costs are said to be the commonest means of dipping into government coffers.
Corruption has been the Achilles heel of successive Kenyan regimes.
But the efforts of the country's newly-appointed anti-corruption commissioner - who now has the power to prosecute individuals - are causing ripples in government quarters.
Corruption has long plagued Kenyan politics, causing widespread public anger The Kenyan government has said it could be losing nearly one-third of the national budget to corruption.
Finance ministry officials told a parliamentary committee the losses could be nearly $4bn (£2.5bn) a year. They said individuals were taking huge sums meant for development projects.
Analysts say many Kenyans will be surprised not by the news of the losses, but by the fact the admission has come from such senior officials.
Kitu kidogo - the Swahili for "something small" - is how the kickbacks are commonly described in Kenya.
Taking 10% of an awarded tender or inflating project costs are said to be the commonest means of dipping into government coffers.
Corruption has been the Achilles heel of successive Kenyan regimes.
But the efforts of the country's newly-appointed anti-corruption commissioner - who now has the power to prosecute individuals - are causing ripples in government quarters.
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