Bribery and corruption-linked fraud has overtaken procurement-related vice to become the fastest growing form of economic crime in Kenya in the last two years, a survey by consultancy PriceWaterhouseCoopers (PwC) said on Wednesday.
The report, based on feedback from 102 senior managers and board members, suggests that four in every 10 business leaders, or 42 percent of respondents, have experienced a corruption or bribery incident in the last two years.
This is a rise from a third of the organisations in 2018 despite a spirited battle against the vice by institutions mandated to fight economic crimes such as Ethics and Anti-Corruption Commission (EACC) and Directorate of Criminal Investigations (DCI).
Another 39 percent of the respondents experienced fraud during tendering compared with 34 percent two years ago, making the two vices the costliest to organisations.
Customer-driven fraud as a result of advancing technology that links them to goods and services was also reported to be rising, giving chief executives sleepless nights, while asset misappropriations was dropping.
A third of the 102 companies in the PwC survey reported to have suffered a loss of more than Sh10 million, an increase from 23 percent in 2018.
The firms, which were hit by the crimes, reported an estimated cumulative loss of Sh5.5 billion, with two of the organisations reporting losses in excess of Sh500 million — unchanged from 24 months ago.
“The message from the respondents is that the fraudsters are getting bolder and the cost of economic crime is on the rise. So we cannot afford to be complacent,” Muniu Thoithi, the regional forensic services leader at PwC, said.
Most of the crimes at 36 percent were masterminded internally, while 27 percent originated from external partners such as agents and shared services providers.
Overall Kenya’s prevalence to economic crimes have fallen by 58 percent from 75 percent in the past two years, but remains higher than 47 percent global average.
Seven in 10 reported to have invested in programmes to fight corruption or bribery.
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