US Trade Representative Katherine Tai addressing journalists at Serena Hotel, Nairobi on July 19, 2023. Photographer Lucy Wanjiru/File Photo NMG
By Citizen Digital
The United States of America has flagged rampant bribe requests and extortion of U.S. firms by Kenyan government officials to secure tenders.
The 2024 National Trade Estimate Report on Foreign Trade Barriers released on March 29 by U.S. Trade Representative Ambassador Katherine Tai notes that U.S. firms have had very limited success bidding on Kenyan government tenders, with corruption being a significant concern.
“Many of these tenders are challenged in the courts. Foreign firms, some without proven track records, have won government contracts when partnered with well-connected Kenyan firms or individuals,” the report says.
Tai says U.S. firms have expressed concerns about the Kenyan government’s procurement system IFMIS, citing insufficient connectivity and technical capacity in county government offices.
American companies have also described Kenyan county government officials as apathetic, adding that there are central control shutdowns and security gaps that render IFMIS vulnerable to manipulation and hacking.
The U.S. further notes that corruption is a major barrier to doing business in Kenya as its companies continue to report bribery requests from local government officials.
“Corruption is widely reported to affect government procurements at the national and county levels. Kenya has not effectively implemented its anti-corruption laws. U.S. firms routinely report direct requests for bribes from all levels of the Kenyan Government,” the U.S. Trade Representative notes.
‘SHIPMENT RELEASE DELAYS’
Additionally, Tai says American companies have taken an issue with the Kenyan customs’ process of releasing shipments.
The time required for the process, according to the U.S. government, has concerned American businesses, as well as “the use of a complex and inefficient process that involves many steps with uncoordinated offices, despite the implementation of a single window system.”
“Many U.S. companies have commented that Kenya’s one-stop customs clearance system does not operate as intended and that pre-arrival processing of electronic documents is ineffective,” the report says.
It adds that companies have also raised concerns about inconsistent application of classification and valuation decisions, as well as unnecessary transit inspections.
Regarding Kenya’s importation of meat, dairy, and poultry products, the United States says the requirements are complex, non-transparent and costly.
For instance, it cites the no-objection letter importers of meat, dairy, and poultry products are required to obtain from the Directorate of Veterinary Services (DVS).
“Importers have reported that the DVS has at times provided them with non-sanitary-related grounds for denying permits, such as the local availability of a similar product. The DVS does not always provide written justification for not issuing the letter,” the report says.
‘INCREDIBLE JUDICIARY’
At the same time, the United States government says the Kenyan Judiciary’s resolution of disputes over tariffs and taxation is subject to delays and uncertainty.
And while the Kenya Revenue Authority (KRA) has offered an alternative dispute resolution mechanism to help taxpayers resolve some tax disputes more quickly since June 2015, the report says U.S. companies have expressed concerns with delays in tax dispute resolutions through the mechanism.
The report further notes that the case backlog and continued corruption undermine the judicial system’s credibility and effectiveness, despite efforts to increase its efficiency and public confidence.
“While judicial reforms are moving forward, bribes, extortion, and political considerations continue to influence court cases. As such, foreign and local investors risk lengthy and costly legal procedures,” says the United States.