Kenya tops list of countries with firms using ethics to attract financing
Lars Benson, the Regional Director for Africa at the Center for International Private Enterprise.
What you need to know:
- Ethical practice is the use of ethical values to run an organisation.
- Corruption has dissuaded some global investors from investing into the country.
Kenya has the largest number of companies that have joined a global initiative that seeks to enable businesses that are implementing ethical practices to international attract investors.
Ethical practice is the use of ethical values to run an organisation, and applies in all aspects of an organisation’s conduct including corporate governance, employment practices, sales techniques, stakeholder relations, accounting practices, and issues of product and corporate responsibility.
According to Mr Lars Benson, the Regional Director for Africa at the Center for International Private Enterprise (CIPE), Kenyan firms form the largest share of companies that have enrolled in the Ethics 1st programme.
Ethics 1st is a multi-stakeholder initiative being implemented by CIPE where companies join if they feel they want to uphold ethics and integrity in their businesses.
Global best practices
It is an online database that provides information that companies they need when they want to access international finance from investors, foreign banks and development finance institutions, said Mr Benson.
“Kenya has the largest number of firms that are registered on this database,” said Mr Benson.
“Once firms join, they go through processes, procedures and standards that they need to prove that they are truly an ethical business,” he said.
The CIPE boss revealed that the initiative is also helping companies to reduce their operational costs by streamlining their processes with global best practices.
“Another benefit is that it will reduce the cost of doing business up to 20 percent because the programme teaches them to implement processes and procedures that enable them to become much more efficient,” said Mr Benson.
Stolen public assets
This comes at a time corruption both within the public and private sectors in Kenya remains a headache, which has dissuaded some global investors from investing into the country.
According to the World Bank’s Kenya Economic Update 2023 for instance, foreign direct investment (FDI) into Kenya contracted by $27 million in the first half of 2023.
The report added that Kenya’s FDI levels continue to lag behind some of its peers in Sub-Saharan Africa driven by a deteriorating business environment and bureaucracies.
It is for this reason that the Ethics and Anti-Corruption Commission (EACC) has been seeking trace stolen public assets to step the vice in the public sector, where corruption is particularly rampant.
According to the Economic Survey, 2024, the EACC traced public assets worth Sh6.6 billion and recovered others worth Sh3.8billion in 2022/23.
