The prevalence of economic crimes in Kenya is 25 per cent above the global average, a new survey by consultancy firm PricewaterhouseCoopers (PwC) says.
Last year experienced a major rise in economic crimes incidences to 61 per cent from 52 per cent in 2014 with 72 per cent of those interviewed saying they had experienced asset misappropriation in their organization.
Among the respondents, 47 per cent and 37 per cent said that they had experienced one incident of bribery and corruption and procurement fraud respectively.
More than half of those surveyed in Kenya said that they had experienced economic crime in the last two years with cybercrime affecting a quarter of the organisations they represent.
As a result of increasing level of economic crime, employee morale suffered the most damage.
The situation is worsened by the fact that 79 per cent of the respondents feel that the law enforcement agents are not adequately trained and resourced to tackle economic crime.
There is also expectation from 61 per cent of the respondents that there is a likelihood of experiencing a bribery and corruption in the next two years, further complicating the situation.
“Investing in systems to combat economic crimes needs to go hand in hand with investing in the people that are entrusted with the assets and systems in these organisations,” said Muniu Thoithi’s PwC’s forensics leader in Eastern Africa.
Most economic crimes in Kenya are committed by internal fraudsters accounting for 70 per cent of the cases reported by local organisations.
Customers are the primary external fraudsters, identified by half of the respondents as the main perpetrators while agents, intermediaries and vendors account for 10 per cent each.
“A common assumption is that vendors have been mostly responsible for fraud. However, it is the convergence of both the internal and external fraudster that poses the greatest risk to organisations,” added Mr Muniu.
Only five per cent of the respondents in Kenya reported money laundering as an economic crime experienced in their organization.
More than 50 per cent also said that it is unlikely that their organisations will experience money laundering in the coming two years, posing a challenge to the institutions to invest in ensuring compliance with the regulatory requirements to sustain this expectation.
The report comes at a time when the country is faced with mega cases involving bribery schemes and fraud networks that have seen the National Youth Service lose about Sh791 million, among other cases.
There are also allegations of bribes involving senior government officials and international companies such as British American Tobacco and tire maker Good year whose investigations are ongoing.