Kenya Corruption Report

Corruption is rampant within Kenya’s police. The Kenya National Police Service is ranked as the most corrupt institution in the country, and bribery is reported to be the only way to access the police and expedite services (HRR 2016). Three out of four Kenyans consider most or all police officers as corrupt (GCB 2015). Half of all Kenyans who have come into contact with the police report having paid a bribe (GCB 2015). The police also struggle with a lack of oversight and organizational and technical deficiencies (BTI 2016). Kenya’s police relentlessly engage in false imprisonment, abuse of human rights and fabrication of charges to extort bribes (BTI 2016). Corrupt police officers are rarely arrested or prosecuted for corruption crimes (HRR 2016). Companies report the business costs of crime in Kenya to be high and police reliability is rated as poor (GCR 2016-2017).

In December 2016, Kenya’s National Police Service Commission fired 127 traffic police officers after they found evidence of large suspicious money transfers between officers that could not be explained (Kenyans, Dec. 2016).

The competitiveness of Kenya’s business environment is impeded by rampant public-service corruption. Complying with administrative requirements takes a lot of time and is plagued by red tape (GCR 2016-2017). Registration and licensing services are severely affected by bribery, making starting a business very costly (TI Kenya, 2014). One in six companies expects to give gifts and make informal payments to get an operating license, and every third company expects to pay bribes to obtain a construction permit (ES 2013). Businesses also experience difficulties when dealing with utility services; an estimated quarter of all firms report paying bribes and facilitation payments to acquire electrical and water connections (ES 2013). Companies report bribes and irregular payments to utility companies are common (GCR 2015-2016). Getting an electric connection takes fewer procedures than the regional average and the time required is also significantly shorter (DB 2017). Starting a business takes slightly less time than elsewhere in the region (DB 2017).

There is a very high risk of corruption in Kenya’s land administration. Kenyans report a high likelihood of bribery demands in meetings with land service officials, and corrupt practices reportedly occur in almost 20% of all interactions (TI Kenya, 2014).  Companies should be aware that possession of a land title does not guarantee property ownership, making land-grabbing and seizures by powerful elite common as a result of pervasive corruption and impunity (BTI 2016). Fake land title deeds are frequently used and disappearances of title deeds from the Registrar’s office are common; houses built on illegaly acquired property are often demolished without prior notice (BTI 2016).

In addition, property rights protections are inadequately enforced (GCR 2016-2017). Registering property in Kenya takes around the same time as the regional average, but it requires 9 steps compared to an average of 6 steps elsewhere in the region (DB 2017).

The tax administration in Kenya carries a high risk of corruption. Companies report that irregular payments and bribes in the process of tax payments are very common (GCR 2015-2016). Around one in three Kenyans perceives most or all tax officials to be corrupt (GCB 2015). Tax rates are identified among the most problematic factors for business (GCR 2016-2017), and the process of filing taxes is burdensome (TI Kenya, 2014). On average, companies make 31 tax payments a year and spend nearly 200 hours filing, preparing, and paying taxes (DB 2017).

Companies face a high risk of corruption in Kenya’s customs administration. Rampant corruption at Kenya’s ports and border points is the most problematic factor for international trade, followed by tariffs, burdensome import procedures and crime (GETR 2016). Companies report that irregular payments and bribes are common (GETR 2016). The lack of transparency in the customs administration has serious consequences for security in Kenya. Border compliance procedures in Kenya take significantly longer than the regional average (DB 2017).

Bribery of border officials lets Al-Shabaab fighters enter the country easily to organize terrorist attacks that fuel the costs of business (LA Times, Apr. 2015). It is also alleged that Kenya’s army is involved in a sugar-smuggling racket with the Islamist group Al-Shabaab, worth as much as USD 400 million a year (The Economist, Nov. 2015). The Port of Mombasa has been named as a major hub in the illicit ivory trade; corruption, conflicting interests of the various authorities involved, and weak scanning abilities facilitate the trade (The Citizen, May 2016).

Kenyan public procurement is subject to rampant corruption and bribery. Companies report that bribes and irregular payments are highly common in the process of awarding public contracts (GCR 2015-2016). Tendering fraud is the fastest growing economic crime in Kenya: One in every three companies reports experiencing fraud in procurement during the past two years (PwC 2016). Businesses report that the vendor selection stage is most likely to be subject to fraud (PwC 2016). Allegations exist that high-level corruption takes place in energy, airport construction, and infrastructure procurement processes; a number of contracts were awarded to foreign firms that allegedly did not comply with public procurement laws in Kenya (ICS 2016). Furthermore, the process of devolution has led to an increase of patronage in county-level procurement processes (BTI 2016). A survey among government officials concluded that procurement fraud is prevalent, particularly on the county level (EACC 2016).  Companies report diversion of public funds and favoritism in the decisions of public officials to be common (GCR 2016-2017).

On the Public Procurement Oversight Authority (PPOA) website, companies can find information on Kenya’s public procurement regulations, debarment from participation and procurement manuals, and can submit bids. Companies found guilty of violating procurement regulations may be debarred at the discretion of the director general. All major transactions require competitive bidding by law (ICS 2016). Companies are recommended to use a specialized public procurement due diligence tool to mitigate the corruption risks related to public procurement in Kenya.

Kenya Power, the national electricity company, stands accused of procurement fraud over handing a contract to a Chinese firm that had been in existence for only 11 months and thus not meeting the requirement of having audited reports for the last 18 months, raising suspicion about the transaction (Standard Digitial, Dec. 2016). Furthermore, the price of the contract was KES 1.2 billion higher than the bid of the lowest bidder (Standard Digitial, Dec. 2016). In another instance, a major pipeline construction project in Kenya has reportedly cost taxpayers over USD 350 million following allegations that officials colluded to construct a pipeline with a much higher capacity than necessary for the purpose of operating a kickback scheme (Daily Nation, Mar. 2017).

The country’s top politicians are facing corruption charges from Kenya’s Ethics and Anti-Corruption Commission and from Swiss authorities. Former finance ministers, permanent secretaries, and senior government officials have been linked to extensive bribery schemes involving a number of inflated state contracts worth USD 700 million that were awarded to phantom vendors. As a result, a number of necessary infrastructure projects were not delivered (Guardian, Mar. 2015). No one has been sent to jail over the case so far (Tuko, Dec. 2016). The fallout of the scandal is continuing; Swiss prosecutors are trying to recover funds stashed away in Swiss bank accounts (The Star, Apr. 2017).

High levels of corruption threaten Kenya’s natural resources. Six senior officials from the Kenya Wildlife Service (KWS) were suspended due to alleged corruption and neglect of duty that contributed to pervasive poaching (Save the Rhino, May 2014). Despite the government’s efforts to curb corruption in the KWS, conviction rates for corrupt officials and wildlife offenders are very low (Save the Rhino, May 2014). Extensive deforestation and forest degradation in Kenya are direct results of extensive corruption by forest management officials (REDD 2013). It is alleged that some members of Kenya’s Forest Service collude with loggers in kickback schemes (Standard Media, Nov. 2016).