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Private sector corruption on the rise, endangers long term investment

By Frankline Sunday | Jan 28th 2015 | 3 min read
By Frankline Sunday | January 28th 2015
Iria-ini Tea Factory- Workers in operation at Iria-ini tea factory yesterday. KTDA director, Peter Kanyago urged farmers and other stakeholders in the tea industry to embrace the use of tea plucking machines. PHOTO: JOHN GATHUA/ STANDARD.

Kenya's private sector has warned that high levels of corruption within its ranks is increasing the cost of doing business and endangering long term investment.

The caution comes in the wake of renewed efforts by the Government and private sector players to improve the country's global ranking in the cost of doing business survey and increase the flow of foreign direct investment.

"The private sector is often pointing out that there are high levels of corruption within Government and we complain about being asked for bribes but we are also overlooking the fact that the vice is alive within the private sector itself," said Vimal Shah, Chief Executive of Bidco Oil Refineries.

Mr Vimal, who also doubles up as the chairperson of the Kenya Private Sector Alliance (KEPSA), stated that it is time for the private sector to iron out ethical and integrity issues within its ranks.

Data from a study commissioned by Kenya Association of Manufacturers (Kam) indicates that Kenya's transport and communications sub-sector leads the private sector with a corruption perception of 32 per cent.

The survey which was conducted in 2012 collected views from company staff, management and regulatory authorities in a bid to map out the perception of the vice in the country's private sector.

The procurement department was ranked top as the most likely to be corrupt with almost half (49 per cent) of the respondents naming it as most vulnerable.

The survey stated that Police and Municipal authorities were the top institutions in the country that demanded for facilitation from the private sector.

According to Kam Chief Executive Betty Maina, the ethical standards in the country's private sector is wanting and more work remains to be done in improving the situation.

"Ethical standards are a challenge for everyone, and it is important that businesses become part of the anti-corruption crusade both in terms of Government-Government, business-Government and private sector graft," she said.

Ms Maina was speaking at a forum organised by Kepsa and Kam on the Global Compact Network Kenya (GCNK), a private sector initiative in the country to entrench the 10 universally accepted principles in the areas of human rights, labour, environment and anti-corruption.

The GCNK is the local arm of the United Nation's Global Compact, the World's largest corporate sustainability initiative which draws membership of over 12,000 members globally.

Kenya which has more than 80 members all drawn from various large and small corporate organisations is the largest African arm of the UN Global Compact.

According to Safaricom's Chief Executive Bob Collymore who was nominated to the UN Global Compact Board in 2012, sustainability in Kenyan businesses is essential in ensuring economic advancement in the long term.

"The message we need to understand is that corruption might appear a quick-fix solution in the short-term but in the long-term we are killing the future prospects of our businesses," he said.

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