Tuesday, March 15, 2005

Stealing = Poverty, Stealing discourages investment from Kenyans in kenya, Abroad and from Foreigners

Robbery: The unlawful taking or attempted taking of property that is in the immediate possession of another by force or threat of force.

Douglas Okwatch and Paul Kimemia

A new survey has exposed how Kenyan politicians and civil servants are milking companies doing business with the Government of bribes.
The survey, carried out jointly by the World Bank and a government think-tank, says that businesses are paying an average 7.5 per cent of the contract value as kickbacks to politicians and civil servants.
That means for a contract worth Sh100 million, a company would have to pay out Sh7.5 million as bribes, a cost which will likely be borne by the public.
The amounts paid out vary from sector to sector, according to the survey by the Kenya Institute for Public Policy Research and Analysis and the World Bank.
The bribes, or "unofficial payments", are highest in the paper, printing and publishing sector, where companies are parting with an average 11.5 per cent of the contract sum.
Other sectors that attract relatively high kickbacks are textile, garments and leather (9 per cent), wood and furniture (8.9 per cent) and metal sector (8.8 per cent). In the machinery sub sector, the politician and civil servant brokers are asking for an average of four per cent in bribes.
There is, however, no guarantee that private companies get government jobs, according to the report, even after giving bribes.
The survey was carried out in agreement with another by the global corruption watchdog, Transparency International, which showed that politicians have joined police officers as among the most corrupt class of people in the country.
TI ranked the Kenya Police as the most corrupt institution, followed by political parties and Parliament.
The KIPPRA survey titled Corruption, firm growth and export propensity: Findings from Kenyan manufacturers confirms allegations of massive corruption in government procurement.
The report says while public servants extract bribes from investors to issue licences, politicians assist business people to circumvent extortion by civil servants.
Ironically, politicians are the investors’ worst enemy, according to the findings.
The more politician friends an investor has, the higher the proportion of his earnings he is forced to spend on bribes.
The survey has found that there is a very strong correlation between the proportions of annual sales spent in bribes and the number of politicians that business people know and trust enough to talk freely about business.
The more the political friends, the more the bribes companies pay.
The survey also found harambees were a possible conduit for bribes paid in exchange for favours, including access to government contracts.
Location wise, Nairobi based firms bear the brunt of corruption: They pay higher amounts more often while firms in Nakuru also pay a higher than the average percentage of annual earnings and contract values as bribes.
And corruption seems to be taking its toll on smaller firms. Though they reportedly pay lower bribes to facilitate licensing and other services compared to the large firms, a bigger proportion of their annual revenue goes towards unofficial payments.
The study also discovered that firms, which avoid paying taxes, were likely to spend a bigger proportion of their earnings on bribes than law-abiding ones.
Officials at various points of entry such as airports, the port of Mombasa and borders are among the worst extortionists. Companies exporting their goods are the biggest targets for bribe seekers.
"The actual act of exporting brings perceptions of higher profitability, therefore deepening the exposure to corruption," says the KIPPRA report.
The think tank appeals to companies to help the Government fight corruption.
It recommends the enactment of the pending Procurement Bill as a matter of urgency and the review of government procurement with a view to strengthening, streamlining and increasing accountability.

Uhuru Ni Haki

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