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Businesses anxious as confidence in Kenya’s Judiciary falls

BUSINESS
By Moses Michira | February 11th 2016

Falling confidence in the Judiciary has emerged as a major risk for Kenyan businesses, according to a global consultancy firm.

Repeated allegations of corruption have dented the credibility of the judicial system to compound other more pronounced risks including terrorism and the 2017 General Election, according to findings by Control Risks – an international firm that seeks to scale and mitigate potential risks.

“Terrorism, corruption, a precarious Judiciary and general elections will be key risk drivers of the Kenyan economy in 2016,” Control Risks East Africa Senior Managing Director Daniel Heal said. The fears relating to the Judiciary come days after the committee of the Judicial Service Commission recommended the suspension of a judge of the Supreme Court who has been accused of taking a Sh200 million bribe – allegedly to influence the outcome of an election petition.

While the accused, Justice Philip Tunoi, has yet to be found guilty of bribe-taking, political leaders have described the allegations as the single biggest stain on the Judiciary. Individual businesses have however expressed reservations about the accuracy of rulings issued by various courts in isolated incidents.

Control Risks has also indicated corruption poses one of the biggest risks for the business community this year, besides the threat of terrorism, which has in the past impacted heavily on specific sectors, including tourism.

“Terrorism is a risk that is not going away. The actual terror attacks aside, a major concern to businesses is the threat of these attacks, which has the effect of deterring foreign investors from entry, investment or partnership with Kenya or Kenyan companies.”

Mr Heal said this while unveiling the ‘RiskMap 2016’ report yesterday, which listed Nairobi, Mombasa and Northern Kenya as most vulnerable to terror attacks. Trends in tourism arrivals have indicated that Kenya could be rising from the devastating impact of attacks, with visitor numbers in December rising fastest in 24 months.

Slow and expensive

It is the first report that expressly lists concerns about the integrity of the Judiciary as a risk, with several past surveys citing corruption in the wider public service as an impediment to doing business. Last year, the UK came close to condemning the Judiciary, describing the legal process as ‘slow and expensive’.

“Legal recourse is slow and expensive in Kenya, with some cynicism about the objectivity of certain executive and judicial branch decisions,” the Foreign and Commonwealth Office in its report on Overseas Business Risk for 2015.

It, however, qualified its position in expressing optimism that the major reforms undertaken in the judicial system in Kenya, including the vetting of judges and magistrates, could address the prevailing challenges. Other forecasts predict that interest rates will climb, to present the biggest hurdle for businesses in 2016.

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