NAIROBI, Kenya, Feb 27 – Three-quarters of Kenyan firms have experienced at least one form of economic crime in the past two years.
This is according to a Global Economic Crime and Fraud Survey by PwC which also puts the global average at slightly below 50 percent and the African average of 62 percent.
116 Board members and Senior Managers in large, medium and small organizations say Asset Misappropriation continues to be the most prevalent economic crime in Kenya and globally.
Fraud committed by consumers ranked second in the survey with a 37 percent incident rate but significantly prevalent in the financial services.
Other economic crimes captured by the survey include; procurement fraud, bribery and corruption, business misconduct, accounting fraud, cybercrime, HR fraud, money laundering, insider trading among others.
Forensics Leader at PwC East Africa, Muniu Thoithi, says losses attributable to economic crime continue to prove a challenge for Kenyan organizations with firms reporting to have lost at least Sh10 million in the last two years, a 23 percent rise from the 2016 report.
“This maybe an indication of increased awareness on the part of Kenyan organizations,” Thoithi comments, adding that, “as Kenyan organizations set out policies to prevent and control fraud, we can hope that the number and costliness of fraud incidents will reduce.”
Nevertheless, the report shows Kenya’s prevalence rate of economic crime and the margin of difference between Kenya and the global/African averages from 2016 reveals that fraud in Kenya continues to be a pervasive problem, “requiring serious, well thought out and even societal interventions to both prevent and control it.”
For the first time, the report compares the survey results in Kenya to those observed in the East African Region (Uganda, Tanzania, Uganda, Rwanda) and Zambia, with Kenya ranking highest in the incidence rate of economics across the board.
The report recommends a heightened detection process to curb fraud following 2018 survey revealing that corporate fraud has been at an all-time high, globally.
“Not only is it necessary to have the right technology and internal controls in place, organisations must invest in people and create an organisation culture where integrity, transparency, vigilance, and accountability in encouraged and upheld consistently by all stakeholders,” notes the GEC survey, at the 2018 survey had the highest prevalence rate of economic crime.