Businesses and governments across East Africa are losing millions of dollars in assets and money, more than their counterparts in other global regions, a new survey by audit firm PricewaterhouseCoopers (PwC) shows.

The PwC survey released on Wednesday said Kenya recorded the highest level of economic crime globally, a result that was indicative of the state of affairs in the EAC region as it warned the trend was worsening as countries battled procurement fraud both in private and public sectors.

“While Kenya was the only East African country that participated in the survey the results would apply for Uganda, Rwanda, Tanzania and Burundi as the economic outlooks for the member states are similar,” said Alphan Njeru, director PwC Public Sector Group Leader Consulting division, during the release of the survey in Nairobi.

Improved technology, a growing number of techno-savvy employees and increased access to the Internet have exposed the region to fraudsters, according to anti-fraud experts and business executives.

Further, companies are ill-prepared to fight this intrusion, which is costing them millions of dollars annually arising from information security breaches and corporate theft.

Larger companies employing more than 1,000 employees were at a higher risk of economic crimes but were more successful in identifying these crimes compared to smaller companies as they tended to dedicate more resources to detecting and preventing the crime, showed the survey which polled executives from 78 countries.

At least 66 per cent of the respondents polled by PWC in Kenya said their organisations had fallen victim to economic crime for the past 12 months compared to 57 per cent in 2009.

This is above Africa’s average of 57 per cent and nearly double of the global average of 34 per cent, implying that economic crime in the region was growing at a higher rate than in other regions.

A November survey by audit firm Deloitte showed weak control structures in most EAC companies were making it easy for fraudsters. Deloitte estimates that financial institutions in Kenya are reeling from losses of nearly $30 million through fraud cases reported in 2010.

In the first quarter, the firm says about $3.7 million was lost, with the second quarter recording a higher figure of $3.9 million. In the third-quarter, $17 million and $5 million disappearing in December.

“Most fraud is committed by internal fraudsters, primarily junior staff and middle managers,” said Martin Whitehead, PwC director, regional investigation and forensic services practice.

Two years ago a similar survey showed that agents and intermediaries committed the most fraud. Current trends put companies at risk of losing more money to economic crimes without being noticed.

Where noticed, victims go free because of existing loopholes in the judicial system.

Increasing economic crime poses a threat to the countries’ investments as companies surveyed globally cited the trend as a threat especially in Kenya and Nigeria.

Other recent economic crimes committed in Kenya include squandering of global funds, misappropriation and theft of company assets, bribery and corruption and cyber crime.

Among respondents in Kenya who reported incidence of economic crime, 73 per cent named asset misappropriation as the most prevalent form compared to 57 per cent in 2009. Accounting fraud followed at 38 per cent, bribery and corruption took 23 per cent while money laundering was at 13 per cent.