HOW KENYA IS BLED DRY: CORRUPTION IN PUBLIC ENTERPRISES

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Francis Fukuyama’s book, “Trust”, shows that countries and economies that have a high level of trust among their citizens consistently deliver more economic value than those with lower levels of trust. He cites, as among the most trusting, countries of northern Europe and those with a predominantly Anglo-Saxon culture (UK and the USA). These countries generally tend to have the highest quality of life and deliver high value to their citizens. These cultures also have relatively low levels of corruption in both individual citizens and corporate organizations. Countries in the Arab world and in the African continent, on the contrary, have much lower levels of trust and doing business here is very risky. It is not surprising, therefore, that the quality of human life is low in Africa and the Arab world, this despite their very rich natural resource endowments (Africa has most of the world’s known minerals while the Arab world is awash with oil on which the modern world runs). Arab and African countries, because of the positive correlation between trust and corruption, score very high in the various corruption indices.

Corruption spawns long-lasting negative effects on individuals and nations. The cost of doing business goes continuously up meaning that basic goods and services steadily get out of reach of ordinary citizens. The only option left is that those individuals who are able to seize and control the country’s resources are the only ones able to live like kings. Their compatriots are left to live a life of unimaginable poverty. Further, the effects of corruption become deep-seated and denature a country’s basic soul turning what should have been a rational existence into an unreasonable one. One cannot help being reminded of the Hobbesian state of nature in which man’s existence becomes “solitary, poor, nasty, brutish and short”.

The Kenyan press has been screaming itself hoarse the past few weeks about cases of corruption and scandals that beggar belief. Every day that you pick your daily paper from the newsstand you are treated to accounts of theft and sleaze at public-owned enterprises (POEs). It makes you wonder if these enterprises exist to provide products and services as per their charters or they are merely a conduit for the personal aggrandizement of those who happen to be in control at the time. In the last week of May 2018 alone and coming into June, accounts of corruption in major POEs have been dizzying. Figures of monies looted are simply beyond the comprehension of ordinary minds. To begin to imagine the scale of the looting, pundits have had to tell us what the amounts would do, for example, build so many schools, pay so many police officers, etc, etc.

In late May 2018 police investigators showed up at the National Youth Service (NYS) headquarters on Thika Road, in the capital Nairobi and took away for questioning the Director General and dozens of staffers for alleged corrupt deals that the newspapers had been reporting on in the preceding weeks. They were looking for evidence that the staffers benefited from the gargantuan tender scandals centered on procurement of goods and services supplied to the NYS. The scale of theft was reported to be to the tune of nine billion Kenya Shillings (or about US$100million). Since then, these people have been arraigned in court charged with multiple counts of corruption under various laws, including under the Economic Crimes Act.

Dozens of suppliers suspected of defrauding the NYS and business organizations that they control have been caught up in this scandal. The prime suspects have included top ministry officials, the Permanent Secretary among them. She has denied wrongdoing. With the arrest of these officials, the general public cannot avoid seeing a strong connectionbetween occupying positions of responsibility in POEs and personal enrichment. From this, it is only a short step to ordinary people making the link between personal wealth and holding a position of responsibility in public enterprises. This is counterproductive to a country’s meaningful development. It would be a sad day if managers of public organizations are in it for what they can steal and line their pockets with-instead of creating value and contributing to national goals. Such a country will not have long to go before it chokes on its own contradictions.

Kenyans take consolation from seeing the high and mighty held to account. Citizens are keenly watching the country’s judiciary led by its highly-respected Chief Justice to see if it will be able to tame the runaway corruption by jailing the perpetrators. Judges and the independent public prosecutors are expected to work effectively to secure convictions for guilty persons in the country’s corruption industry. Citizens will definitely applaud courageous judges who can send high officials to prison and rid the country of the terrible sickness of corruption. In addition, the administrative actions of the President to rid itself of rogue officers i.e by suspending accounting unit bosses and Procurement Managers and coupled with conducting life style audits should be lauded if it achieves the intended goal of stemming future corruption scandals.

Unfortunately, the current corruption scandal is threatening to become the focus of a ferocious political battle within competing wings of the ruling Jubilee party, to which the President Hon. Uhuru Kenyatta and the Deputy President Hon. William Ruto belong. The Sunday Nation (10th June 2018), the largest and most read of the country’s weekend newspapers, reported that politicians allied to the Deputy President’s side of the Jubilee party were irked that the fight against corruption seemed headed in one direction-that of their side-and warned that they would not take matters lying down. They indicated that government agencies fighting corruption were looking in only “one direction” and made clear that this was a witch-hunt. The “targeting” of POEs headed by persons perceived to be close to one faction seems to have escalated political hostilities within the Jubilee party. These politicians accuse prosecutors of targeting “their people”.

The Jubilee party must present a united party. It is the strong hope of the public that this time round, the President of the Republic of Kenya is personally spearheading the war on this monster corruption that threatens the very foundation of the republic. The combined force of the Office of the President and the Presidents resolve provide the political will which is the greatest cornerstone to win this war. The ferocity of rival factions within the party must be tamed by the resolve of the President while ensuring that the entire Government machinery implements his directives.

The NYS scandal, together with other emerging corruption scandals, could seriously damage the effectiveness of the current government. If the government becomes paralyzed by the litany of corruption scandals, it risks total loss of trust by its citizens may become unable to address the challenges facing majority of its people who look to it to deliver on the President’s stated Big Four Agenda items (Health, Education, Housing, and Infrastructure).

Further, if corruption is not tamed, there is every chance that it would mutate into something that the economy cannot sustain, possibly of a political nature such as civil strife and general anarchy. The consequences would be unimaginable for a country such as Kenya which is already burdened by the legacy of inequality and ethnic divisions. There is also the possibility that corruption can seep into other domains of society completely altering the national psyche. Such a situation has happened in other countries (Greece quickly comes to mind). Despite being the cradle of modern democracy, Greeks, the descendants of Plato, Socrates, Euripides, and other fathers of modern enlightened government, have displayed low respect for elected authorities and the work ethic. In fact, the national ethic in Greece, a potentially rich country (which has a rich tourism heritage which attracts millions of visitors each year to its famed sites such as the Parthenon) is such that the country cannot sustain its budget and has had to apply for a bailout from Germany (which asked the Greeks to sell them their islands if they wanted money).

Continued tolerance of corruption will in short order make Kenya globally uncompetitive because all our products will be carrying a “corruption tax” making them so much dearer in global markets. We should soon find ourselves unable to sell our products and services thereby pricing ourselves out of the world market. From there, the country can very easily unravel as there would be no money for providing citizens with governmental services.

Countries which have made a leap from poverty to wealth (such as Singapore) have dealt with corruption very severely as a matter of practice. In his memoirs (From Third World to First), Lee Kuan Yew, Singapore’s founding Prime Minister makes a case for punishing corruption very violently noting that Singapore would never have achieved First World status otherwise. In fact, one of Lee’s own ministers who had been found guilty of corruption could not find any help from the Prime Minister when he was caught with his hands in the national tills. He had to take his own life when all avenues of escape were closed to him. He apologized to Lee in a suicide note left behind. Through this and similar actions, everybody came to know that the Prime Minister would not protect you if you were convicted of corruption. Sabotage against the country would land you in very serious trouble.

It is the considered feeling of this column that deliberate action against corruption is desperately needed. Singapore has provided us with the lead. Consequently, Political will is mandatory. Effective investigative and prosecutorial arms of Government and a bold judiciary will be a key ally of the President and a supportive Citizenry. There cannot be sacred cows in this fight. It is high time that real work was rewarded and sleaze severely dealt with. It is only as we do this that we will be able to build a rational society where genuine value is created from genuine work.

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