Poor governance and rampant corruption in Kenya have had a negative impact on efforts to attract investment, and widespread poverty, rapid population growth, rising unemployment rates and strained welfare services have long posed problems. Nevertheless, Kenya had been thought of as one of the more politically stable countries in Eastern Africa until ethnic disturbances in the wake of the December 2007 presidential elections. The new constitution promulgated in August 2010 is based on good governance, transparency, integrity and accountability - strengthening the fight against corruption.

Positive developments in relation to corruption and investments:

• Political interference in the private sector has been reduced via structural reforms, including privatisation and deregulation, while regulatory procedures have been streamlined and simplified, resulting in Kenya being named as one of the world's top ten reformers by the World Bank & IFC in 2009.
• An increasing number of government agencies have codes of conduct and ongoing reforms of the public financial management (PFM) systems are meant to greatly enhance transparency and accountability in the utilisation of public resources and thereby improve public service delivery.
• An ethics and governance committee of the judiciary has been established to assess the level of corruption in the judiciary, report on individual cases and recommend remedial measures.
• The government launched an Open Data Portal. Kenya is the first African country to make government data accessible to ordinary citizens via the Internet.

Risk of Corruption:

• Despite market reforms, several business surveys reveal that business corruption is still widespread and that companies frequently encounter demands for bribes and informal payments to 'get things done' in Kenya.
• According to surveys, a large number of companies state that public procurement is an area of business where it is common to encounter corruption and requests for bribes.
• The use of agents to facilitate business operations and transactions in Kenya is widespread and poses a risk for companies, particularly at the market entry and business start-up stage.