Kenya Country Profile

Snapshot of the Kenya Country Profile

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. According to the Bertelsmann Foundation 2010, the government lacks a clear will and commitment to effectively curb the rampant corruption in the country. There are individual cases in which perpetrators, usually lower cadres, are taken to trial, yet these are exceptions.

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 has taken more positive steps to develop freedom of information legislation and has also taken the initiative to establish a special quasi-judicial commission to act as a one-stop plea-bargaining shop for confessions of corruption and surrender of illegally acquired assets in order to clean up past corruption cases in exchange for amnesty.

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. Bribery through agents can lead to legal sanctions, including high fines and up to 10-years in prison.