Graft hinders growth of family businesses

Family businesses have ranked corruption as the main barrier to their growth, according to a new survey.

At least seven out of every 10 business leaders polled in the survey by audit firm PriceWaterhouseCoopers (PWC) cited graft as their main challenge. 

The survey, titled “The values effect: PwC 2018 Family Business Survey”, comes at a time when the war against graft has intensified as the Government moves to combat what it believes is to blame for the slow growth of the economy.

The latest PWC survey was conducted late last year and involved key decision-makers in family businesses in 53 countries, including 46 business leaders from Kenya. Compared with Kenya’s 72 per cent, only 23 per cent of global business leaders thought corruption was their biggest problem.

Corruption in Kenya has been getting worse, with the country dropping one point in Transparency International’s global Corruption Perception Index (CPI).

It obtained a score of 27 out of 100, a decline from 28 points scored in 2017 (with zero perceived to be highly corrupt, and 100 very clean). Kenya is ranked at position 144 out of 180 countries and territories listed in the CPI.

Numerous reports have shown that businesses in the country have struggled to access critical government services, with most of them forced to pay a bribe to be served.

For More of This and Other Stories, Grab Your Copy of the Standard Newspaper.

Other challenges faced by local family businesses, according to the report, include accessing the right skills and capabilities (52 per cent), prices of energy and raw materials (52 per cent), increasing international competition (52 per cent) and the need to innovate to stay ahead (50 per cent).

The authors of the report noted that respondents were concerned about how it was difficult to topple established businesses, an indication of the need for the country to polish its antitrust regulations to help startups.

“In a fast-changing and challenging business environment, family businesses in Kenya need to be able to think beyond the immediate demands of the day-to-day business and develop an informed view of the future,” said Michael Mugasa, Partner PwC Kenya and the firm’s Private Company Services Leader.

Do not miss out on the latest news. Join the Standard Digital Telegram channel HERE.

Family businessesPriceWaterhouseCoopersPWCCorruption Perception Index