Kenyan businesses use freebies to win deals - survey

A new global survey on corruption has exposed how Kenyan companies use free entertainment and personal gifts to win and retain lucrative business deals.

The survey by audit firm Ernst & Young shows that 32 per cent of respondents admitted that companies prefer to use treats such as expensive lunches and trips to win businesses.

12 per cent of respondents admitted to use of personal gifts, while 8 per cent use cash payments.

“Kenyan executives show greater tendency to use entertainment or personal gifts to retain or win business. People prefer taking others out for say lunch or dinner because this is not entirely illegal in the country. But the intention of the entertainment is usually to influence the outcome of the tender,” Mr Peter Kahi, Ernst & Young’s head of fraud investigations and dispute resolutions said on Friday.

Seven out of 10 companies in Kenya report incidents of corruption which is significantly higher that the rest of Africa and much higher than the world.

“Kenyan companies report a significantly higher incidence of bribery and corruption (76 per cent) compared to the rest of Africa (67 per cent), Western Europe (22 per cent) and globally (39 per cent),” the survey reads in part.

The survey was done between November 2011 and February 2012 where 1758 interviews were conducted with employees in 43 countries covering North America, Latin America, Europe, Africa, Middle East, Far East and Oceania.

Kenya was among the four countries in Africa that participated in the survey alongside Namibia, Nigeria and South Africa.

This was the first time Kenya was included in the global fraud survey now in it 12th edition and 25 interviews were done in the country.

A sample of the largest companies in each country by turnover was interviewed. Senior executives interviewed included chief finance officers (CFO’s), heads of internal audit, legal and chief compliance officers.

The survey shows that Kenyan executives support for bounty schemes to encourage whistle blowing is high. Global appetite for increased supervision by regulators is mirrored in Kenya.