On October 26, we learned that Kenya’s rank in Transparency Interational's Corruption Perceptions Index dropped seven places since 2009. Kenya now ranks 154 out of 178 countries—well below most of its EAC neighbors. But how bad is it, in fact? Will the new Constitution do anything to make the situation better?
In Kenya, no one seriously doubts that corruption is a key constraint to greater growth and prosperity.
Corruption comes in two forms. Petty corruption occurs when citizens are asked for kitu kidogo (“a little something”): to get a document stamped, a service provided, or an infraction overlooked. The amounts are small, but hardly petty to the many victims living on less than $1 a day. Kenya also has large-scale corruption—public purchases made at inflated prices; public benefits handed out to people who are not entitled; fictitious companies being paid for contracts that they never executed.
We read about such things in the paper day after day, and we hear large sums of money associated with behaviors of this kind. Mention Kenya and corruption, and talk about the unresolved Goldenberg and Anglo Leasing scandals is never far behind.
Corruption is clearly happening in Kenya, and it involves not only the public sector, but also the private sector and civil society. It is certainly a drag on economic growth and poverty reduction. But exactly how serious a drag? How bad is the situation in Kenya, compared for example to the situation in neighboring countries? The answer is surprising difficult to ascertain.
When people want to answer these questions, they usually turn to corruption indices prepared by organizations like TI. These indices, which cover many countries and so provide comparability, generally show Kenya ranking much lower than its neighbors.
But how reliable are these indices?
They typically aggregate perceptions, and perceptions are notoriously difficult to compare. Is the perception that corruption is really bad in Kenya, and not so bad in its neighbors, partly a consequence of the much higher level of press freedom in Kenya? Many business leaders in Kenya think so; they believe that the situation for businesses is no worse in Kenya, and in some ways much better. Are the business people right, or are the indices?
Unsatisfied with qualitative data, some people have tried to obtain more solid quantitative data. But hard data are not easy to find. Often we have specific indicators that fraud or corruption has occurred—auditors find companies or contracts that appear to be fictitious; whistleblowers say that contractors are paying bribes or kickbacks; high bid prices suggest that companies are colluding to inflate prices and share the rent gained; civil works exhibit poor quality or lack equipment, suggesting that the contractor has skimmed off the savings.
These facts are not in themselves proof of fraud or corruption, even if they are often correlated with it. But even if we investigate and prove the fraud and corruption, it is notoriously difficult to quantify its extent. If someone pays $500,000 in bribes to get a $60,000,000 contract, and then uses substandard concrete to execute the works, what is the total loss? Poor concrete on a terrace may not be too serious—but in the walls and ceilings it may impair the entire building and everything inside it. And if it is difficult to quantify the cost of corruption in specific cases, it is so much more difficult to quantify it across many cases across a whole economy. Hence, meaningful cross-country comparisons are virtually impossible.
When you look at more objective measures of budgetary management and institutional capacity, there are some well-known objective indicators—and with these indicators, paradoxically, Kenya appears to do quite well. Kenya’s Public Expenditure and Financial Accountability rating is solidly in line with the other EAC countries. Its Country Policy and Institutional Assessment rating is a bit lower than the other EAC countries—but significantly higher than the average for all IDA countries and for all lower-income countries.
Kenya scores higher than most of its neighbors in voice, regulatory quality, and budget openness. Its macroeconomic management has been exemplary—its debt-to-GDP ratio fell from 60% in 2002 to 40% in 2008, even though it has never received HIPC debt relief. It is hard to square these objective measures of capacity and management with the perceptions of rampant corruption.
Moreover, the Government of Kenya collects about 22% of GDP in revenues—one of the highest revenue mobilizations in sub-Saharan Africa. I have always been puzzled how that could occur in a country with rampant corruption. If corruption is so pervasive, why aren’t Kenyan taxpayers using corrupt means to avoid their tax obligations—thereby bringing tax receipts down? And why is tax collection so much lower in ostensibly less corrupt countries?
Another way to compare Kenya’s situation to its neighbors is to look at what the Government is doing to fight corruption. There are three things that any government needs to do to have an impact, and Kenya’s track record is mixed: strong in two areas, but relatively weak in the crucial third.
First, a government that is serious about fighting corruption needs to eliminate opportunities for corruption. This involves reforming institutions to minimize discretion and create checks and balances. A lot has already been done in Kenya in this respect, e.g., in the road, water and power sectors, and the new Constitution will help to get more of this important work done.
Second, a government needs to be able to detect corruption when it occurs. This requires strong auditing mechanisms. There is no better deterrent to corruption than regular professional audits—particularly when audit results are also shared with the public, which can then help to hold errant officials to account. We have seen some successes in this area recently in Kenya, for example with the maize and education scandals in 2009. The new Constitution strengths checks and balances as well as the independence of oversight agencies, so it will help in this area as well.
Third, and most important, a government needs to punish corrupt individuals to the full extent of the law.
If audits indicate possibly corrupt behavior, the evidence of that behavior needs to be referred to competent investigators, who (as warranted) need to present the results of their investigations to prosecutors, who in turn need to pursue corruption cases aggressively through the courts. Judges need to have the courage to convict, when the facts and the law require it. Public officials who are under suspicion need to step aside so that investigations can go forward without interference.
These steps are critical, and this is where Kenya so far has not met the standards that law-abiding citizens can reasonably expect to be met. But the new Constitution may change that. Chapter Six of the new Constitution sets out high standards for leadership and integrity in Kenya, and we have recently seen Government officials acting in accordance with those higher standards.
In October, two ministers, a permanent secretary and a
facing serious allegations of fraud and corruption have all been forced to leave office.
Successfully fighting a culture of impunity requires visible results, and new results will help to change behaviors and perceptions. Kenya's new Constitution will help.
When the African press reported last month that Zimbabwe’s President Robert Mugabe, not a leader known for his austere spending habits, had warned his generals against allowing his country to become "like Nigeria and Kenya, where you have to reach into your pocket to get anything done," the reaction in East Africa’s biggest economy was one of derision. Kenya’s collective scorn, however, was not aimed at Mugabe. It was directed inward. "The truth is bitter," ran a typical comment on the Standard newspaper’s website. "You know you are in trouble when a fellow thief accuses you of stealing!" said another. "Everyone is corrupt in Kenya, even grandmothers," lamented another.
As the Jubilee administration, which triumphed in Kenya’s 2013 elections, passes its one-year mark, public perceptions and media priorities appear to be undergoing a fundamental shift. The obsession with the cases brought by the International Criminal Court (ICC) against President Uhuru Kenyatta and Deputy President William Ruto, in connection with Kenya’s 2007-2008 post-election violence, is subsiding as the likelihood of Kenyatta facing trial slowly fades. Taking its place in the public’s mind is a concern that was momentarily sidelined but that never, in truth, went away: burgeoning corruption.
Newspapers warn about it in editorials, columnists denounce it, beleaguered civil society groups lament it. Even foreign diplomats, bruised by the general drubbing they received after daring to express dismay at the imminent election of two ICC-charged politicians, have put their heads above the parapet to sound the alarm. "Corruption is undermining Kenya’s future," 17 Nairobi-based ambassadors, along with the local International Monetary Fund (IMF) director, declared in mid-April. In an op-ed published in local papers, the ambassadors offered the government help putting in place the "systems, processes and procedures needed to make progress in the fight against corruption."
They probably assumed the fact that donors cover nearly 27 percent of government expenses entitled them to an opinion. Yet the envoys’ tone was so emollient — "feeble slaps with gentle strokes," the Daily Nation newspaper termed it — many readers were left wondering why they had bothered publishing at all.
The government saw things differently. The head of public service summoned the envoys for a scolding, while Kenyatta’s press office accused them of libel, disrespect, and knee-jerk racism. "Who, but the most accomplished snake oil salesman can prescribe a nifty concoction for a non-existent ailment?" asked Eric Ng’eno, Kenyatta’s speechwriter, in his own op-ed.
Sadly, the ailment is a little more concrete than Ng’eno would have his audience believe.
The "I paid a bribe" website set up by Kenyan activist Anthony Ragui, which crowd-sources its data by inviting ordinary Kenyans to inform on sleazy officialdom, may offer a fascinating glimpse into the routine palm-greasing that characterizes daily encounters with the police, ministries, and municipal authorities. But it is grand corruption — the kind practiced by business cartels enjoying chummy relationships with top politicians and civil servants who control public tendering — that worries economists, newspaper editors, and anti-corruption campaigners.
That form of sleaze, they warn, is raging so unchecked that it threatens to render Kenya’s promised 6 percent growth rate irrelevant, sabotaging the "Africa Rising" narrative that decrees an expanding middle class, combined with increased investor confidence, Chinese-built infrastructure, and an educated work force, is set to trigger takeoff. It also makes Kenya, long seen in the West as a strategic bulwark against Islamic terrorism radiating from the Horn of Africa, an unreliable partner.
When the Supreme Court confirmed Kenyatta’s contested electoral win in March 2013, many Kenyans comforted themselves with the notion that the economy was safe in the hands of the same ethnic Kikuyu and Kalenjin elite that has dominated the economy since the days of Uhuru’s father, Jomo Kenyatta, and his successor, Daniel arap Moi. Although the problem is in fact one of elites writ large, Kenyan corruption is traditionally viewed in terms of economic rivalry among the country’s main ethnic groups. A presidency under ethnic Luo contender Raila Odinga, the argument went back in 2013, carried the risk of unprecedented "eating" by a long-sidelined group, hungry for the perks of office. "There was definitely a narrative doing the rounds that the country couldn’t ‘afford’ a Raila election win, whereas these guys [Kenyatta and his allies] had already made their fortunes and their appetites would be smaller," says one Western diplomat, speaking on condition of anonymity.
It was an argument that mistook the nature of human greed, argues John Githongo, who resigned as Kenya’s anti-corruption czar in 2005 after stumbling upon a $1 billion procurement scam. "It doesn’t work like that," he said. "When you have one million you want 10 million, and when you have 10 you want 20. It’s never enough."
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Sleaze has always dogged Kenyan affairs, predating independence from Britain in 1963. One of many fascinating tales recounted in David Anderson’s Histories of the Hanged, which examines the tactics the British used to break the Mau Mau rebellion, is the exposure by London officials of a construction scam in 1953, which prompted Harold Whipp, Nairobi’s City Council engineer, to put his head on a railway track.
The global anti-corruption group Transparency International owes its very existence to the intractability of Kenya’s "eating" culture. It was in Nairobi that Peter Eigen, then the retiring World Bank director for East Africa, frustrated at seeing a succession of development programs undermined by graft, decided in the 1980s to create an organization dedicated to tackling the blight.
Each Kenyan administration has boasted its own high-profile corruption scandal. Under Moi, there was the Goldenberg scam, which started with fake gold exports and spiraled outward, triggering the collapse of the Kenya shilling. Mwai Kibaki’s presidency saw the Anglo Leasing tendering scandal, involving 18 military and security contracts signed with phantom Western companies; the episode that spurred John Githongo’s resignation and three-year ex
ile (the topic of my book, It’s Our Turn to Eat). The coalition government ushered in after the traumatic elections of 2007-2008, in which Raila Odinga served as prime minister, was marked by scams that emptied Kenya’s granaries of maize and drained oil from its state petroleum company.
Now, despite touting itself as the "digital" administration that would outrun Raila’s staid "analogue" team, the Jubilee administration looks set to be remembered for two massively ambitious contracts dogged by distinctly old-fashioned allegations of bidding irregularities and eye-popping levels of skimming.
The first is a project to provide every schoolchild — starting at the tender age of six — with a laptop. The project was suspended in March by Kenya’s Public Procurement Administrative Review Board after it emerged that the Indian company that won the bid did not actually manufacture laptop computers. The second is a proposal to build a standard-gauge railway from Mombasa to Nairobi and beyond. Costing $5.2 billion, it represents the biggest investment in Kenyan history — and was awarded without a public bidding process to a Chinese company blacklisted by the World Bank in 2009 for graft. "It’s a lose, lose project. We [Kenya] lose, the president loses, the Chinese lose. It is not worth it," concluded economist David Ndii after examining the arguments for and against the railway project.
Yet the presidency seems bent on seeing both projects through, fueling the conviction that private profit-making is being put before public interest. "It’s very difficult to understand the rationale for these projects," says Samuel Kimeu, head of Transparency International’s Kenya branch, which has publicly appealed to the government to reconsider the railroad scheme. "There’s no evidence the public will be getting value for money."
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What perhaps most frustrates the government’s critics is its failure to trace the causal connection between grand corruption and deteriorating security in a country once regarded as a rare "safe" African state. Last September’s al-Shabaab siege on the Westgate shopping mall, in which 67 people died, may have seized international headlines, but Kenya’s vulnerability to Islamic extremism has been a mounting concern for both Kenyans and Western donors for decades. Just last Sunday, three people died and scores were wounded when two bombs exploded in packed public buses on a busy commuter highway in Nairobi, prompting a newspaper columnist to declare: "Kenya is at war."
A government backlash against Somalis living in Kenya was widely anticipated in Westgate’s wake, and last month it began, with police arresting thousands in Nairobi’s Eastleigh district, a melting pot for both refugees from Somalia — illegal and authorized — and Kenyans of Somali ethnicity. The police sweeps, in which women have been raped, Somali businesses targeted, and property stolen, have caused huge anger among community leaders, who warn that Operation Usalama ("security") risks doing al-Shabab’s work for it by radicalizing many young men. What’s more, reports that a 10,000-shilling ($115) bribe wins freedom from detention in fetid police cells and the cages installed for the purpose in a Chinese-built, Safaricom-branded sports stadium suggest the operation is unlikely to do much for national security — particularly at a time when a spate of grenade attacks and car-bombings continue to keep public anxiety high.
The clumsiness of the response exposes a seemingly sophisticated African state’s inability to protect its citizens. But the fault, government critics say, cannot all be placed on the shoulders of customs officials and police officers who regard border posts, road blocks, even detention facilities as opportunities for "a little something." It originates at the top.
The first of the 18 suspended Anglo Leasing deals, after all, involved a tamper-proof, passport printing system, something that might have helped the authorities control how many Somalis migrate to Kenya. Another promised a forensic laboratory, which would have come in handy when Kenyan police needed to establish whether the four al-Shabab gunmen responsible for Westgate had escaped its smoldering ruins. Yet another deal promised a military surveillance system that might have enabled the authorities to track al-Shabab’s movements across Kenya’s porous border.
"The chickens have come home to roost," says Githongo. "All those dodgy contracts I spent my time investigating were security-related. People were all over those contracts to make money. There was no concern about whether they were fit for purpose."
Sameul Kimeu of Transparency International agrees. "At every stage and from every perspective, the link between corruption and security is clear. The question is why nothing is being done about it."
In the ultimate illustration of grand corruption’s perky durability in Kenya, Anglo Leasing has recently made a comeback. Despite major question marks over their identity, several of the firms involved in deals dating back to the Moi and Kibaki’s administrations have successfully sued the government in European courts for breach of contract. Attorney-General Githu Muigai says the contracts must be honored if Kenya is ever to borrow money on international markets, a suggestion that triggered a rare joint protest by both opposition and government members of parliament who stormed out of a lunch thrown by Treasury Cabinet Secretary Henry Rotich to lobby support, chanting "can’t pay, won’t pay."
"What we don’t understand is how these ghost companies could have won these court cases," says Kimeu. "We suspect someone was either grossly negligent when it came to mounting the government’s legal defense or complicit in stealing from the public."
The return of Anglo Leasing, like some drooling, jabbering member of the undead, perhaps illustrates a deeper truth about Kenyan society. Yes, the ICC issue may momentarily have been sidelined. But the brazen, unchecked impunity of Kenya’s political and business elite — whether it comes to human rights violations or grand corruption — remains one of the country’s severest handicaps. And if Kenya can’t finally grasp that nettle, the country’s promise may end up as nothing more than a cautionary tale.
Tags: Africa, Corruption, Default, Democracy, Economics, Free, Kenya, Report, Web Exclusive
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