Kenyan firms ranked among the most corrupt

Kenya’s private sector has been listed among the world’s most corrupt, presenting the Uhuru Kenyatta government with yet another daunting task to tackle in the quest to make East Africa’s largest economy the region’s preferred investment destination.

International audit firm Ernst & Young says in a report released on Thursday that one in every three Kenyan companies surveyed had paid bribes to win contracts.

The survey conducted in 59 countries ranks Kenya behind Egypt, Nigeria and Namibia as economies where private-sector corruption is most pervasive and where tender award processes are distorted.

More than a quarter or 27 per cent of the chief executives, financial controllers and internal auditors surveyed in Kenya cited high levels of fraud in their companies — only lower than 44 per cent in Egypt, 30 per cent in Nigeria and 28 per cent in Namibia.

E&Y says private-sector bribery, fraud and corruption is mainly driven by middle-level managers, especially men aged between 35 and 45.

PRESSURE TO PERFORM

“Their actions are mainly driven by pressure to perform and achieve set targets,” said Miriam Gaituri, the associate director at Ernst & Young.

The study found that most recipients of bribes do not ask for it but act in a manner that signals their hands need to be greased.

“We found that when someone wants a bribe they delay services and so you feel you have to grease their hands for things to move faster,” said Peter Kahi, a partner at the audit firm, adding that up to 90 per cent of the interviewees said they had never been asked for a bribe directly.

READ: Tender fraud passes bribery on Kenya’s economic crimes list

The survey found that entertainment was the most common method of bribery that companies use to acquire and retain business. Half of the executives interviewed said it was justified. Another 27 per cent of those surveyed justified offering personal gifts to get business.

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