Bribery and corruption-linked fraud has overtaken
procurement-related vice to become the fastest growing form of economic
crime in Kenya in the last two years, a survey by consultancy
PriceWaterhouseCoopers (PwC) said on Wednesday.
The
report, based on feedback from 102 senior managers and board members,
suggests that four in every 10 business leaders, or 42 percent of
respondents, have experienced a corruption or bribery incident in the
last two years.
This is a rise from a third of the
organisations in 2018 despite a spirited battle against the vice by
institutions mandated to fight economic crimes such as Ethics and
Anti-Corruption Commission (EACC) and Directorate of Criminal
Investigations (DCI).
Another 39 percent of the
respondents experienced fraud during tendering compared with 34 percent
two years ago, making the two vices the costliest to organisations.
Customer-driven
fraud as a result of advancing technology that links them to goods and
services was also reported to be rising, giving chief executives
sleepless nights, while asset misappropriations was dropping.
A
third of the 102 companies in the PwC survey reported to have suffered a
loss of more than Sh10 million, an increase from 23 percent in 2018
The firms, which were hit by the crimes, reported an estimated
cumulative loss of Sh5.5 billion, with two of the organisations
reporting losses in excess of Sh500 million — unchanged from 24 months
ago.
“The message from the respondents is that the
fraudsters are getting bolder and the cost of economic crime is on the
rise. So we cannot afford to be complacent,” Muniu Thoithi, the regional
forensic services leader at PwC, said.
Most of the
crimes at 36 percent were masterminded internally, while 27 percent
originated from external partners such as agents and shared services
providers.
Overall Kenya’s prevalence to economic
crimes have fallen by 58 percent from 75 percent in the past two years,
but remains higher than 47 percent global average.
Seven in 10 reported to have invested in programmes to fight corruption or bribery.
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