This post originally appeared on the Corporate Compliance Trends blog.
When I visited Nairobi a few weeks ago, the signs of President Obama’s recent visit to attend the Global Entrepreneurship Summit were still clearly visible all around – from welcome posters to the spruced-up cityscape. I was in Kenya to work with CIPE’s partner organization, Kenya Association of Manufacturers (KAM), on a training-of-trainers workshop devoted to anti-corruption compliance and practical ways in which mid-sized companies in particular can implement robust compliance programs. The topic is quite timely.
Corruption remains a key problems in Kenya, affecting both the country’s democratic and economic development prospects. It was one of the leading issued discussed during President Obama’s visit, which resulted in an agreement signed between the Kenyan government and the U.S. to introduce new anti-graft measures. The 29-point deal stipulates, among other things, that Kenya will step up investigations into corruption cases, increased U.S. assistance and advice to Kenyan anti-corruption agencies and advice on relevant legislation, and international commitments by Kenya to join the Egmont Group of Financial Intelligence Units and the Extractive Industries Transparency Initiative (EITI).
At the same time, profound challenges persist. Within days of Obama’s visit, Kenya’s Office of the Auditor-General released a troubling report that brought to light some uncomfortable numbers. According to the report, only 26% of money spent and collected by the government has been fully approved in an audit for 2013-2014. The health department alone failed to account for 22 billion Kenyan shillings ($216 million) worth of spending. What is more, over 12,000 false names were discovered on the government payroll.
Is the report, combined with the renewed anti-graft commitments and support from the U.S., going to be a wake-up call for Kenya to get serious about fighting corruption? Perhaps. The need is certainly there and well understood. Ndung’u Wainaina, Executive Director of the International Centre for Policy and Conflict, commented in Daily Nation, Kenya’s leading newspaper:
“Kenya is paying a high price for corruption. The single biggest enemy of entrepreneurship and doing business in Kenya is corruption. Graft has eroded the public’s confidence in public institutions and undermined the economy. (…) The government of Kenya should seize the agreement with the United States to increase the momentum and tighten the war on corruption by denying safe havens to corrupt officials and their illicit assets. The ethics and integrity laws governing public officials should be strictly enforced.”
That’s good advice. It is also encouraging that a recent workshop organized by the Kenya Leadership and Integrity Forum (KLIF) in Nairobi brought together public sector and non-state stakeholders who validated the draft Kenya Integrity Plan (KIP) for 2015-2019. KIP is meant to provide a framework for the design and implementation of anti-corruption initiatives by the stakeholders. Therefore, it can only succeed if efforts to curb corruption in the public sector are matched by an equal commitment to integrity from the private sector.
To be meaningful, this commitment on the private sector side must go beyond the companies pledging not to pay bribes. The next logical and necessary step is for them to implement internal policies, procedures, and mechanisms to ensure that the risk of improper payments are minimized. That is exactly what CIPE and KAM are working toward in developing anti-corruption compliance training and tools for local firms.
Anna Kompanek is Director for Multiregional Programs at CIPE.