Corruption in extractive sector undermining economic growth, says OECD

Rampant corruption in Kenya’s extractive industry is undermining economic growth, the Organisation for Economic Cooperation and Development (OECD) has said.

The OECD argues that graft poses a major threat to development where countries that are highly vulnerable to corruption usually experience sluggish economic growth.

“Corruption undermines trust in public institutions, disrupts sector effectiveness, reduces the level of revenue collected from resource production and distorts decisions on budgetary allocations,” said the Organization in a recent statement.

“The increasing global competition for access to natural resources coupled with the resource-seeking nature of foreign direct investment can also further exacerbate corruption risks and create perverse incentives for extractive companies,” added OECD.

The Organization has urged Kenya’s private sector to complement the government’s efforts in tackling graft, saying that relying on state efforts alone will be ineffective.

“In these cases, supporting governmental reform and transparency and promoting the adoption of anti-corruption measures is important. However, relying exclusively on government action to effectively tackle corruption is illusory in situations where resource rents are the primary means for exercising and perpetuating political influence. Both the supply and the demand sides need to be addressed, at domestic and international levels, and between private and public actors,” said the group.

Last week, President Uhuru Kenyatta said he has done all that he can to curb graft though the level of corruption is still high.

However, Cord leader Raila Odinga on Wednesday dismissed the President’s assertion that agencies charged with fighting corruption had failed to do their job despite support from State House.

Corruption has reached unprecedented rates not only in Kenya but across the entire continent where experts are pointing fingers at Nigeria for failed development majorly caused by the latter’s high level of graft.

“Africa is behind because Nigeria has not released her potential. It’s time the leaders rose because one in every five Africans is a Nigerian,” said Patrick Lumumba, former Director of the Kenya Anti-Corruption Commission in his keynote address at the seminar, entitled ‘The Role of the Legislature in the Fight Against Corruption’ in Nigeria. The seminar was organised by the anti-corruption committees of the Senate and House of Representatives in Abuja.

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