East Africa's high corruption rates bad for business
Saturday July 13 2013
Tanzania has the highest number of bribery cases involving businesses in the region, new data shows.
A new Global Corruption Barometer report released by Transparency International (TI) shows that the rates of corruption in the business sector in the country are the highest in the region at a score of 3.4, followed by Burundi at 3.2 and Uganda at a score of 3.
Comparatively, Kenya and Rwanda scored 2.7 and 1.7 respectively.
This means incidence of corruption in companies across the region is still high despite recent investments in anti-bribery policies.
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The score was measured on a scale of 1 to 5, where one indicated “not at all corrupt” while five showed “extremely corrupt.”
Analysts said companies were using free entertainment and personal gifts to win and retain lucrative business deals.
A 2012 survey by audit firm Ernst & Young showed that 32 per cent of respondents admitted that companies prefer to use treats such as expensive lunches and trips to win businesses.
Researchers at TI said drivers and transport companies in Kenya paid bribes totalling $6,715 every month to speed up passage of their goods through customs and road checks.
The bribes paid to revenue, police, immigration, ports and weighbridge officials make up an informal taxation equivalent to 1.4 per cent of the average value of goods handled monthly by the 69 transport firms from Kenya who took part in the survey.
TI said Tanzania still has the highest corruption rates in most of the sectors surveyed including education, religious bodies, non-governmental organisations, the judiciary, the public, media and health with scores of between 3.5 and 4.5.
“Tanzania is now trying to become a capitalist economy and is at the stage where Kenya was in the 70s and 80s,” said Mwalimu Mati, the CEO of Mars Group, an anti-graft lobby. Since the country is now attracting more foreign investors Mr Mati said there is a likelihood for such investors to pay a bribe in order to start a business in the country.
The East Africa Bribery Index indicates for example that the average bribe paid for land services is more than $100 in Kenya and the average value of a bribe paid to the judiciary in Uganda is more than $200.
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According to the report, Kenya, Uganda and Tanzania have been listed among the top 10 most corrupt countries in the world where bribery rates are over 50 per cent.
The top three most corrupt countries are Sierra Leone, Liberia and Yemen in that order. Kenya leads in police and parliamentary corruption in the region with a score of 4.8 and 4.0 respectively.
Uganda has the highest military corruption but ties with Tanzania on political parties and police corruption rates, which are still high.
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“Corruption is still high in the three East African countries because there are no real government policies to punish the corrupt culprits and therefore most corruption cases don’t result in punishment,” said Mr Mati.
The report which based its survey on 114,000 people in 107 countries around the world shows that Rwanda has the least corruption rates in the region with a score of less than 2.0 in all the sectors measured followed by Burundi.