The U.S. government has highlighted pervasive corruption as the key deterrent to foreign investments in Kenya, citing a lack of political will and slow progress in prosecuting corruption cases.
According to a 2023 report by the U.S. Department of State, Kenya’s failure to address widespread corruption has significantly diminished its prospects of attracting foreign direct investment (FDI). The report identified “lack of political will, limited progress in prosecuting corruption cases, and the slow pace of reform in key sectors” as the primary obstacles to Kenya achieving a higher ranking in corruption evaluation.
Investor confidence in the Kenyan economy has been eroded by numerous reports of corruption in crucial government sectors such as health and ICT, as highlighted by local media. Allegations of high-level corruption related to health, energy, ICT, and infrastructure contracts have been extensively covered by the media, further exacerbating concerns among potential investors.
The report emphasised how corruption has adversely impacted FDI, with instances reported of corruption influencing the outcome of government tenders. Journalistic investigations have revealed corruption as a determining factor in selecting companies to bid for government contracts, raising concerns among American businesses.
Aware of the opaque process of contract awards and the risk of endorsing corruption, U.S. firms have grown cautious about investing in Kenya. Compliance with the Foreign Corrupt Practices Act, which prohibits bribery of foreign officials, poses significant challenges for American companies seeking to win public procurements in Kenya.
The U.S. government’s stance reflects a growing recognition of the need for transparency and accountability in Kenya’s governance to foster a conducive environment for foreign investment. Addressing corruption effectively and prosecuting corrupt officials are critical steps towards restoring investor confidence and promoting sustainable economic growth in Kenya.
