How graft is undermining Kenyan economy, security

Last year, Kenya fell from 27 to 25 on Transparency International’s Corruption Perception Index, where 0 refers to a country considered highly corrupt, and 100 very clean. Kenya looks set to fall further in 2015, as various analysts claim that the country is now more corrupt than it has ever been.

But why is corruption increasing? And why should people care?

Endemic corruption is a complex matter. However, the recent upsurge can be explained, in large part, by the stagnation of institutional reforms and devolution.

With regards to the former, limited institutional reform is problematic as it facilitates the continuation of a culture of impunity, damages morale and skews incentives.

For example, in the police, it is understandable that many lower-level officers will try to get a share of bribes when they see their seniors and peers getting away with the same, and given their low wages, poor living standards and insecurity risks.

At the same time, devolution has encouraged a localisation of corruption.

On the one hand, new layers of taxation, procurement, planning and so forth — in the face of insufficient oversight — have provided new opportunities for politicians, state officers and businesses to be corrupt.

On the other hand, the new layers of political competition provide perverse incentives for politicians to acquire wealth and redistribute patronage.

In short, in a context where politicians seek to protect their positions or campaign for bigger posts, governors have an incentive to use resources and contracts to appease local members of the county assembly (MCAs) lest they try to impeach them.

At the same time, many MCAs are trying to repay debts acquired in 2013 and build up a war chest so that they can vie for parliamentary seats in the next election. Many MPs and senators have similarly set their eyes on the local governorship.

PROBLEMATIC

The runaway corruption that results is problematic for various reasons, but let me note just two. First, it is economically inefficient and diverts resources away from social welfare, health, education and other critical sectors.

Second, it presents a threat to people’s security, and is in danger of undermining the Jubilee administration and Kenyan State. This is particularly critical when one looks at the war waged by Al-Shabaab, which is increasingly taking place on Kenyan soil.

This includes the corruption that allows for the movement of people and goods across the supposedly closed Kenya-Somalia border. This form of corruption led, for example, a senior police officer to help smuggle weapons across the border that were later used in the Mpeketoni attacks of June 2014.

As John Githongo has argued, “When one is talking about hitting the issue of tax avoidance and transfer pricing, one will find the same institutions cropping up when looking at terrorism finance, human trafficking, money laundering, drug trafficking”.

An excellent example of these diverse problems is the sugar industry. A few weeks ago, President Uhuru Kenyatta issued a Sh1 billion bailout to Mumias Sugar Company, citing corruption and mismanagement. Corruption in the sugar industry has, thus, forced a substantial diversion of government resources, which could have been spent on education, health care, better police living quarters and so forth.

Corruption in this sector is also having a negative impact on the economy of western Kenya, where local farmers have long faced a distorted market and low prices, whilst it has simultaneously ensured that ordinary Kenyans face unnecessarily high prices.

Finally, and as the anthropologist Jacob Rasmussen argued in an excellent paper presented at the European African Studies Association conference in Paris this week, corruption in this instance also has important implications for citizen and state security.

First, because corruption and mismanagement — together with high import tariffs — and associated high prices, ensure that it continues to make economic sense to smuggle sugar from elsewhere in the world across the Somalia border into Kenya. This is an illicit trade Al-Shabaab is likely to continue to benefit from, albeit to an unknown extent, and which certainly serves to further open the porous border.

And second, because endemic corruption means that this illegal trade can continue as drivers with overloaded trucks can easily bribe border guards, police at checkpoints, and officers at weighing stations. The trucks can also transport more dangerous cargo.
In short, corruption is not only illegal but is undermining the Kenyan economy and security situation.

Gabrielle Lynch is an associate professor of comparative politics, University of Warwick, UK. ([email protected]; @GabrielleLynch6)