According to PwC report, economic crime is ever-evolving, and becoming a more complex issue for organizations and economies. In Kenya, the incidences of economic crimes rose to 61% from 52% in 2014.
World economic crimes rate stands at 36% while that of Kenya is at a staggering 61%, 25 percent above the global average, a new survey by consultancy firm PricewaterhouseCoopers (PwC) reports.
According to PwC report, economic crime is ever-evolving, and becoming a more complex issue for organizations and economies. In Kenya, the incidences of economic crimes rose to 61% from 52% in 2014 with 72% of respondents saying they had experienced asset misappropriation in their organization.
Although the regulatory landscape is also changing, the report indicates that the change is “bringing with it numerous challenges to doing business.” It further argues that local law enforcement is not necessarily perceived as able to make a material difference, the onus is squarely on the shoulders of the business community to protect itself, and its stakeholders, from economic crime.
"A worrying trend in the survey is the low levels of confidence in local law enforcement's ability to investigate and prosecute economic crimes," said PwC's Forensics Leader in Eastern Africa Muniu Thoithi.
This report comes in at a time when senior officials in the government are being investigated over the loss of Sh791 ($7.7) million at the National Youth Service (NYS). But that is not just it, the Eurobond saga also continues to taint the country’s not so good image in the limelight of corruption, not forgetting the case of Imperial Bank, where top managers are said to have stolen more than Sh34 billion ($334 million) from bank deposits.
In all these cases, the perpetrators were insiders who collaborated with external fraudsters to hide their tracks, a fact that has now been confirmed by PwC's findings.
“A common assumption is that vendors have been mostly responsible for fraud. However, it is the convergence of both the internal and external fraudster that poses the greatest risk to organizations,” added Mr Thoithi.
According to the survey, up to 70% of the cases reported by local organizations in Kenya are committed by internal fraudsters. Customers are identified as primary external fraudsters, recognized by half of the respondents as the main perpetrators while agents, intermediaries and vendors account for 10 per cent each.
In his efforts to fight corruption in the country, the Chief Justice of Kenya Willy Mutunga confessed his frustrations arguing that the country was being run by criminal goons in collaboration with politicians. "As long as I fight the cartels and they are protected, you cannot achieve anything. You are taking these people into a corrupt investigating system, through a corrupt anti-corruption system, and a corrupt Judiciary," Dr Mutunga said.
Kenya is placed third globally behind South Africa (69%) and France (68%) in the suspicious ‘race’ towards the highest score of economic crimes. Zambia tied with Kenya at 61 percent with Nigeria coming in forth in the global survey.
Kenya topped the list with seventy-two percent of the respondents saying that they did not have faith in their law enforcement agencies adding that their law agencies were not equipped enough to handle the crisis. This was against the global average of 44 percent.
Sixty- one percent of the respondents from 99 organizations from different economic sectors said they had suffered some form of economic crimes in the last 24 months. 20% of the survey respondents on average believe that it is likely that their organizations will experience these leading economic crimes in the next 24 months. This calls for a fresh look.
Thoithi advised that "investing in systems to combat economic crimes needs to go hand in hand with investing in the people that are entrusted with the assets and systems in these organizations."
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