The risk is especially high within the infrastructure and construction sectors due to the complex contractual relationships and demands for highly-skilled personnel.
According to a report published by PriceWaterhouseCoopers (PwC) last year, tendering fraud has overtaken bribery and corruption to become Kenya’s fastest growing economic crime.
Indeed, the report noted that 36 per cent of Kenyan chief executives said they had at one time or another been asked to pay bribes to win tenders or to get some business.
PwC said that typical fraudsters usually sway the tendering process in favour of bribe-paying contractors – some of whom go to the extent of filing court cases to sabotage their competitors.
These practices impede development and downplay the government’s ability to provide essential services to its citizens and sped up economic growth.
We have recently seen several multi-billion-dollar Chinese-backed projects being hit by strong tendering headwinds that threaten to derail their implementation. This should not happen in a society that claims to adhere to the rule of law.
Fortunately, President Uhuru Kenyatta – who has personally admitted to the existence of powerful cartels in government that are helping shadowy investors to clinch State tenders – has declared war on corruption.
President Kenyatta, who early this year suspended some of his Cabinet secretaries over corruption allegations, has made it clear that private investors found paying bribes to win public tenders will be blacklisted and barred from future tendering.
The president has already issued directives to the Attorney-General to amend the law to make the private sector subject to anti-corruption laws. This will enable the government to target, prosecute and punish investors found engaging in corruption.
This move is praiseworthy as the giver of a bribe is as guilty as the taker. However, it is worth noting that fighting graft is never easy and construction industry players should team up to eradicate the vice that threatens to cripple the sector.
We must make every effort to uncover corrupt practices, and put in place tight compliance processes to forestall such practices from arising both within our companies and across third party relationships.