By Phyllis Wakiaga
All our good intentions on economic and social development amount to nothing if every single step we take in the right direction is dealt a huge resounding blow by corruption. With the country still reeling from the effects of a prolonged and polarizing election period, the looting in critical facets of our country’s development, only further deepens existing divides and exacerbates poverty levels.
For businesses, the single most consistent factor that threatens to deter investors, both local and foreign, is the increasing cost of doing business. A great amount of which is attributed to fraudulent practices and malfeasance.
The Manufacturing sector’s performance has been on a downward trajectory for the past few years, owing to, among others, the cost of energy, influx of substandard imports and counterfeits, Non-Tariff barriers and multiple levies and charges, especially at county levels. Through loopholes in the execution of policies and regulations, corruption has found a way to keep these impediments consistent, thereby hampering the successful diffusion of industries throughout the country.
The multiplier effect has been huge losses to businesses, as the cost burdens keeps them unproductive and unprofitable. As a consequence of this unproductivity, investors become more skeptical and cease from expanding locally; as a matter of fact, those currently here start moving out to more lucrative markets, with stronger governance structures and institutions that oversee the execution seamless and predictable policies and regulations. In addition to the high capital required to start-up businesses, rent seeking – which has become a culture – has significantly lengthened the time it takes new investors to settle in, let alone break-even. Ultimately, this has affected the ability of industry to provide productive employment; and therefore it is no surprise that Kenya holds the highest unemployment rate in the EAC at 39.1%.
Additionally, counterfeits continue to enter into the markets, their networks becoming more sophisticated and elusive, with the assistance and protection of corrupt officials. The larger problem with counterfeits is that they put at risk, the health and well-being of our citizens. For example, gas cylinders that explode in homes, expired and unsafe medication, and contaminated products among others. Subsequently, we have a large portion of the population that is both unwell and unemployed; which affects productivity and alienates them from active civic processes.
The Government’s Big 4 Agenda identifies four critical pillars that will bring about sustainable economic development if the outlined policy actions in each are adhered to. However, only a few months into the commencement of its implementation and each of the key pillars is either completely plagued by corruption or bears a strong whiff of graft.
Just looking at each of them for instance; the mega corruption unveiled at Kenya Power definitely raises serious concerns for the manufacturing sector, which has consistently cited the cost and reliability of power as a major cost for business. The NCPB maize scandal also sets back the Food Security pillar, highlighting substantial gaps in the food sector in the country. Health and Housing have also been saddled with graft and embezzlement for the past two years. The Auditor General, just last month, confirmed the theft of 5 Billion Kenya Shillings from Afya House from 2016, and COTU has released a report alleging irregularities in the approval of projects worth more than 13 Billion. These are just a drop in the ocean.
Even policies designed to inculcate and institutionalize inclusion have been pervaded by corrupt practices. The 40% local content requirement and 30% procurement set aside for Women and Youth are frequently rife with allegations of nepotism and cronyism that dilute the end goal and locks out the intended marginalized populace denying them the benefits of equity.
Overall, each cycle of breaking news is more disheartening than the last, for each and every individual in this country. If we are true to our endeavour to rebuild our country and to bring about equality, it is time to take quick, decisive and discernible actions. It is no longer enough to identify the rot, we must root it out by strengthening the institutions rendered vitreous by polarizing politics. These institutions will be the nurturers of our shared understanding of national cohesion, and their tenacity will stir up the desire for all us to uphold integrity in the efforts to salvage our country. We must restore hope in our youth who have interpreted corruption as a normalcy. We must do this for the sake of our country’s future.
The writer is the CEO of Kenya Association of Manufacturers and the UN Global Compact Network Representative for Kenya. She can be reached at firstname.lastname@example.org