Business Corruption

According to the US Department of State 2011, secured interests in property are recognised and enforced. The legal system formally protects and facilitates acquisition and disposition of all property rights. In practice, however, obtaining titles to land is a cumbersome and often a non-transparent process, which is a serious impediment to new investment. Companies should be aware that although they are legally protected against expropriation and are guaranteed compensation, land is becoming an increasingly sensitive and heated issue in Kenya, and local and national level ethno-political considerations may see the protection of property rights inadequately enforced. The obtaining of land titles is frequently made more complicated by improper allocation of access and easements to third parties. It is rather common for public officials or members of the police force to accept bribes in order to falsify deeds or contracts.

Political Corruption

In the article Corruption and Land Administration 2006 by Paul van der Molen and Arbind Tuladhar, the Minister of Lands and Settlements states that land has been used as a pay-back system for favoured political supporters since independence. According to the same article, the state owns large chunks of land for development and research that are irregularly subdivided and sold. The coordinator of the Kenya Land Alliance reports that all land registries, land boards, the land rent collecting offices and the central registry in Nairobi are very prone to corruption. The offices of the provincial administration are equally prone to corruption because they are in charge of the executive administration of land within their administrative areas. Other offices prone to corruption include the survey offices, and the land tribunal offices, extending from the chief to the district officer to heads of municipalities.

In a July 2011 article in the Narobi Star, the Land Sector Non-State Actors Network (LSNSA) protested about the 'rampant corruption' in the Ministry of Lands and that recent reforms are just cosmetic. Further, the LSNSA believes that the ministry lacks the capacity to manage the land reforms in the country.

According to a 2010 article by the BBC News, 10 top officials were accused of having allegedly purchased cemetery land at an inflated price of KES 283 million, when it was originally worth KES 24 million. According to the same source, the purchased land was not even suitable for cemetery use.

In January 2009, former Finance Minister Amos Kimunya, who was involved in a dubious privatisation of the Grand Regency Hotel, was re-appointed to his previous position despite a parliamentary vote of no confidence against him. According to the Bertelsmann Foundation 2010, this is an example that confirms that the prosecution of abuse of office is not a political priority. Moreover, the source reports that privatisation is ultimately seen as vehicle for the realisation of individual interests.

Frequency

World Economic Forum: The Global Competitiveness Report 2011-2012:
- Business leaders give the protection of property rights in Kenya, including financial assets, a score of 3.7 on a 7-point scale (1 being 'very weak' and 7 'very strong').

The World Bank & IFC: Doing Business 2011:
- Registering property in Kenya requires a company to go through 8 administrative steps, which takes an average of 64 days and costs 4% of the property value.

Transparency International: Global Corruption Barometer 2010:
- 33% of the households surveyed reported to having paid a bribe to land services in 2009.

- 48% of households consider grand or political corruption in land matters to be a 'very serious problem'.

- 46% of respondents consider bribes to land authorities to obtain favourable decisions a 'very serious problem' in Kenya.

Transparency International Kenya: The East African Bribery Index 2009:
- With a score of 45.6%, the Ministry of Lands is ranked as the fifth most corrupt institution by citizens.

- 15.8% of the respondents interacting with the Ministry of Lands report that the consequence of refusing to bribe was a denial of service.

- The likelihood of encountering bribery in interactions with the Ministry of Lands is reported to be 77.7%.

- The average size of bribe paid to the Ministry of Lands is KES 4,060.