Corrupt suppliers to miss out on Safaricom, KCB tenders

 

President Uhuru Kenyatta and Safaricom chief executive Bob Collymore (right) after addressing a forum during the United Nations Global Compact's 17th Anti-Corruption Working Group Meeting and International Anti-Corruption Conference in Nairobi on December 8, 2015. PHOTO | ROBERT NGUGI 

By NEVILLE OTUKI, notuki@ke.nationmedia.com

In Summary

• Safaricom chief executive Bob Collymore, who is leading the private sector brigade in the war against graft, named East African Breweries (EABL), Kenya Airways and Chandaria Industries as companies that had committed not to do business with tainted firms.
• The telecoms giant last year cemented its anti-corruption stand with the termination of a multi-million dollar tender it had awarded the Lebanese company Mobinets SAL, citing bribery of its staff in the allocation of the contract.
• Mr Kenyatta Tuesday warned that the corruption war would be “painful to perpetrators,” insisting there would be no sacred cows in his government.

Kenya’s largest company by assets Safaricom and the country’s biggest lender KCB Tuesday stepped up the fight against corruption after they committed not to do business with any suppliers named in government tendering scandals.

The two were in a group of the more than 200 firms that signed a new code of ethics for business that binds them to clean practices while bidding for government contracts.

President Uhuru Kenyatta last month formalised the anti-corruption partnership between the private and public sectors, with the launch of tough sanctions against corporate sleaze, including blacklisting of unscrupulous traders and their companies.

Safaricom chief executive Bob Collymore, who is leading the private sector brigade in the war against graft, named East African Breweries (EABL), Kenya Airways and Chandaria Industries as companies that had committed not to do business with tainted firms.

“We will blacklist companies that have been blacklisted by the government in order to effectively choke out unethical practices,” Mr Collymore told the Business Daily on the sidelines of a United Nations-backed conference on corruption in Nairobi.

The move signals a tectonic shift in Kenya’s war against corruption with private firms —who have been blamed for fuelling it by greasing the hands of bureaucrats in exchange for contracts and tenders — taking to the front line.

Audit firm Ernst and Young last year listed Kenya’s private sector among the world’s most corrupt after a survey revealed that one in every three Kenyan companies had paid bribes to win contracts.

Rampant corruption is seen as one of the key obstacles to the improvement of Kenya’s standing as a preferred investment destination, even as the country pushes on with its quest to become East Africa’s investment hub.

No sacred cows

Mr Kenyatta Tuesday warned that the corruption war would be “painful to perpetrators,” insisting there would be no sacred cows in his government.

Mr Kenyatta last month constituted a committee comprising public officials, private sector executives and the media to develop new strategies of fighting runaway graft that is eating away the country’s dream of industrialising by 2030.

The move came in the wake of revelations of mega corruption in government ministries and departments that have entangled top officials in recent months, prompting the President to send five Cabinet secretaries packing.

Transparency International last year ranked Kenya as the 29th most corrupt country in the world.

Corruption has been particularly rife in the public sector, where its impact has condemned the majority of Kenyans to poor public services, slowed down economic growth and left millions unemployed and in poverty.

It is estimated that Kenya could be losing as much as Sh400 billion annually or about a fifth of the budget for the current fiscal year through wastage, pilferage and theft

Public servants, including police officers, also ask for bribes in their day-to-day delivery of services to citizens, increasing the cost of living and stifling ordinary people’s potential to prosper.

Safaricom, which is East Africa’s largest company by assets and profitability, spends more than Sh20 billion annually on procurement in Kenya alone, according to Mr Collymore.

KCB chief executive Joshua Oigara, who is also Kenya Bankers Association (KBA) chairman, said the government would share with the private sector the list of blacklisted suppliers on the e-procurement platform.

KCB’s capital expenditure (capex) stands at between Sh25 billion and Sh30 billion annually, according to Mr Oigara, making it one of the biggest buyers of goods and services outside the government.

KCB and Safaricom have been waging a near lone private sector war against corruption with the publication of sustainability reports, including details on internal fraud, theft and other unethical practices committed by staff.

Safaricom has in the past two years sacked 114 employees for involvement in asset misappropriation, fraudulent expense claims and corruption as shown in the firm’s annual sustainability reports.

Termination of tender

The telecoms giant last year cemented its anti-corruption stand with the termination of a multi-million dollar tender it had awarded the Lebanese company Mobinets SAL, citing bribery of its staff in the allocation of the contract.

Mobinets had been contracted to supply, instal and maintain a system to manage network planning, configuration tools and inventory but lost the tender after it was accused of colluding with Safaricom employees to win the tender.

KCB in 2013 axed about 94 employees implicated in fraud and professional negligence, as shown in the bank’s sustainability report, which highlights its economic, environmental, social and governance performance unlike the annual report that is top-heavy with financial reporting.

Mr Kenyatta’s government has recently come under a sustained attack from the public, the opposition, civil society groups and western envoys over rising levels of corruption and apparent inertia in dealing with it.

Last month, the President declared that all those hoping to do business with the government would be required to sign a code of ethics that binds them to transparent dealings.

Companies that act in breach of the code and their directors will be disqualified from doing business with the State for at least five years.

Mr Kenyatta also announced that banks that act in breach of anti-money laundering rules would lose operating licences and their directors prosecuted as part of the effort to cut the pipeline that finances terrorism.