Transparency International (TI) defines corruption as the “misuse of entrusted power for private gain”. They further define “private gain” to include gains accruing to an economic actor’ close family members, political party and in some cases to an independent organization or charitable institution in which the economic actor has a financial or social interest. Corruption maybe manifested in the following ways: bribery of local or foreign government officials and private companies, fraud, bid submission fraud, embezzlement, theft, collusion among bidders, bribery of parliamentarians and so many more. In Kenya we have seen the manifestation of all these forms of corruption. Corruption has an effect on so many areas in an economy.
Corruption and socio-economic conditions of a nation: Socio-economic factors include the wealth of a country, the distribution of national income and how the public revenues are invested in the overall structure of the state, which fundamentally shapes the quality of life of the population. When funds that are meant for development projects such building of health facilities or for provision of basic amenities such as water and sanitation facilities are diverted to the pockets of a few individuals, it is the general populace that suffers.
Tax evasion is another form of corruption that also has an impact on the socio-economic conditions of a nation. Clearing and forwarding companies have been known to collude with revenue collection officials at the entry points to under-declare cargo. The C&F companies pay less tax for the under-declared cargo while the revenue officials pocket a percentage of what should have been paid to the exchequer.
Tax evasion is another form of corruption that also has an impact on the socio-economic conditions of a nation. Clearing and forwarding companies have been known to collude with revenue collection officials at the entry points to under-declare cargo. The C&F companies pay less tax for the under-declared cargo while the revenue officials pocket a percentage of what should have been paid to the exchequer.
There is a large income disparity in nations where corruption is rampant. This is because corruption concentrates public funds in the pockets of a few people rather than have the funds distributed equitably among the populace through development projects and programs. In all the large corruption deals in Kenya only a few people have ended up enriching themselves at the expense of the entire populace. Hundreds of billions of shillings that have been lost in the Goldenberg, the Anglo-leasing, the Triton, and many other scandals have ended up in off-shore accounts of a few unscrupulous individuals while the majority of Kenyans struggle to survive on less than a dollar a day.
Corruption and independence & integrity of the judiciary: The legal environment, and in particular the way the judiciary functions and the quality of the services provided, has been acknowledged as one of the most significant determinants of corruption. This is due to the fact that only an independent, fairly administered and predictable judiciary can fulfill its role as institutional guarantor of the rule of law, assuring that wrongdoers are punished with a high degree of predictability. Moreover, since much of the corruption in the public sector involves medium-level and high-ranking office holders and politicians, a necessary condition for repressing such criminal behavior seems to lie with the judiciary, as they are assigned the important task of making sure that members of the Government do not act outside the law. However rather than provide the much needed repression to this panacea, the legal systems and the judiciary in most developing countries, have placed more hurdles in the fight of corruption. In Kenya we have had cases on corruption in our judicial corridors for more than ten years which are eventually thrown out or lost on very flimsy grounds.
Corruption and public sector governance: An essential characteristic of good governance is the existence and efficient functioning of institutions that hold public officials accountable. Administrative inefficiency-ineffectiveness has been linked severally to continued corruption in the public sector. The level of bureaucracy in our public institutions is very high. This is has in turn contributed to the increase in corruption within the public sector. Business people are forced to part with some cash so as to speed up matters in the public offices. Files have been known to disappear or for documents to go missing from files only to reappear after the owners of the documents have parted with a certain amount of money.
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