Kenya among those worst hit by fraud in the world, says study

Kenya is one of the countries that has been worst hit by fraud with a new survey ranking it seventh in the world among those with highest levels of economic crime.

Conducted in 99 countries, the survey by PricewaterhouseCoopers found that economic crime continues to be a major concern for most firms. In Kenya, 52 per cent of surveyed respondents said they had experienced economic crime in one form or another.

This places the country second on the continent for prevalence of the vice behind South Africa which has the worst record globally. These figures are reflective of a trend in which Africa has been repeatedly reported as having the worst economic crime record in the world.

“At the regional level, African respondents continue to report the highest percentage of economic crime, though the gap has narrowed significantly since 2011,” read part of the PwC 2014 global economic crime survey.

RANKINGS HAVE IMPROVED

Kenya’s rankings have, however, improved. In 2011 the country recorded the highest level of economic crime among all those surveyed. At the time, asset misappropriation was the leading economic crime in Kenya and the globe.

According to PwC, financial services and the consumer and retail sectors are affected globally with a 49 per cent incident rate, closely followed by the communication sector at 48 per cent.

Kenyan firms have been grappling with high fraud rates that have led to the loss of billions of shillings. Banking Fraud Investigations Department data shows that between November 2012 and April 2013, a total of Sh952 million was stolen from local financial institutions. Most of these funds were stolen in schemes hatched by tech-savvy bank employees.

In the public sector, fraud is a major cause of concern. In a recent Cabinet paper, the government listed tackling economic crime as one of the top priorities in a drive to eliminate wastage of public funds.

The government hopes to achieve this through developing a Kenya Integrity Programme (KIP). The cabinet paper said special focus would be accorded to increasing transparency in provision of medical supplies and free primary education.

Increasing theft could have implications on the cost of doing business as firms are forced to invest heavily in fraud detection mechanisms.

“It means companies will be entering the country with the feeling that they are operating in a suspicious environment,” said Mr Robert Bunyi, a financial consultant.