Kenya-based Chinese firms cite corruption as major hurdle - CNBC Africa

Kenya-based Chinese firms cite corruption as major hurdle

East Africa

by Elayne Wangalwa 0

Most of the firms surveyed singled out the Nairobi City Council and the Kenya Revenue Authority as culprits of corrupt dealings.

With around 400 Chinese state and privately-owned firms in East Africa’s biggest economy, a Business Perceptions Index (BPI) survey was instigated by China-Africa focused initiative, Sino-Africa Centre of Excellence Foundation.

The survey, which covered 75 Chinese firms in Kenya, saw most firms single out the Nairobi City Council and the Kenya Revenue Authority as culprits of corrupt dealings.

“Most of them were asked for bribery when the officials found misconduct in their business practices, like the absence of some business certificate display,” said the report.

(WATCH VIDEO: Kenya to step up fight against corruption)

"There are also cases where the officials took advantage of the companies’ ignorance of regulations and asked for bribery with wrongful conviction."

As a result of this, the report suggested that Chinese companies learn more about Kenyan laws and regulations.

“Chinese companies’ awareness against bribery should be improved and detailed information on business-related regulations and rules should be disclosed and disseminated,” it said.

Other challenges Chinese-based firms in Kenya face include crime, personal safety, obtaining work permits and tax administration, among others.

“Privately-owned companies are more troubled by tax rates, customs and trade regulations and an inadequately-skilled workforce while state-owned companies are more bothered with access to finance and practices of competitors in the informal sector,” the report said.

(READ MORE: China weaves billions into Kenyan textile industry)

Since the visit of Chinese Premier Li Keqiang to the country last year, the number of Chinese expatriates in Kenya has more than doubled, with public as well as private Chinese firms setting up shop in the country's capital, Nairobi.

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