Kenya tops global economic crimes list

By Jackson Okoth

Kenya recorded the highest level of economic crimes worldwide in the past year. This is according to a PriceWaterhouseCoopers (PwC) Global Economic Crime Survey Report, released on Wednesday in Nairobi.

Theft or asset misappropriation was the most common type of economic crime reported in Kenya, followed by accounting fraud, bribery and corruption, and money laundering. And nearly a quarter of companies surveyed said they were subject to cybercrime, which refers to the use of technology to commit an economic crime.

"Economic crimes in Kenya are getting worse because what appears to be lack of adequate deterrent measures, including the fact that most firms do not believe in the ability of the judicial process to deal with the problem," said Martin Whitehead, Head of PwC’s regional forensic practice.

He said Kenya is a fast moving economy with a technosavy population, creating fertile ground for perpetrators to commit economic crimes.

"Our economy is expanding rapidly, but so are economic crimes committed against businesses, Government entities and other organisations," said Alphan Njeru, Leader of PwC’s regional public sector group.

While direct costs of economic crime to an organisation can be difficult to gauge, 70 per cent of the companies that participated in the survey put this figure at Sh10 million.

Top crime

Cybercrime now ranks as one of the top four economic crimes in Kenya. While organisations may be well equipped to detect fraud, advances in technology and greater access to the Internet are exposing them more opportunities for fraud to be committed, particularly cybercrime.

The 6th Global Economic Crime Survey was carried out between June and November this year, involving some 3,877 people from over 78 countries. Included were 91 respondents from Kenya representing large, middle-sized and small firms. Of these, 31 per cent were listed companies, 46 per cent were private companies, and 22 per cent were from the public sector organisations.

While Kenya reported the highest incidence of economic crime, at 66 per cent, it was followed by South Africa (60 per cent), UK (51 per cent), New Zealand (49 per cent), Spain (47 per cent), Australia (47 per cent), Argentina ( 45 per cent), France (45 per cent), USA ( 45 per cent) and Malaysia (44 per cent).

prevailing environment

"We are still in a global recession with huge debts crippling most economies in the west. Most economies in the world are also experiencing high inflation rates and unemployment. Employees world over are thus motivated to commit economic crimes to supplement their incomes," said Alphan Njeru.