INDEX

Rampant corruption hurts Kenya's economic freedom score

Rwanda, Tanzania and Uganda rank at positions 32, 89 and 102 globally in that order.

In Summary
  • It scored an economic freedom index of 55.3 per cent
  • The country scored 28.2 per cent in government integrity due to rampant corruption
Corruption is dangerous
INFORMED PUBLIC: Corruption is dangerous
Image: File

Kenya has trailed its East Africa’s peers in the latest World Economic Freedom Index, ranking position 132 globally on rampant corruption, regulatory efficiency and high tax burden.

The annual report by the Heritage Foundation, a leading think tank, merits the level of economic freedom of a country by measuring four parameters: rule of law, government size, regulatory efficiency and open market.

The survey ranked Kenya as ‘mostly unfree economy’ hampered by weak rule of law (especially government integrity) and less-than-stellar performance in investment freedom and financial freedom.

''The Kenyan economy has been mostly unfree for more than two decades. GDP growth over the past five years, however, has been robust, led by expanded consumer demand,’’ the report read in part.

Kenya scored an economic freedom index of 55.3 per cent, scoring 13.5 per cent in fiscal health, one of the least globally.

It scored 28.2 per cent in government integrity due to rampant corruption

Kenya is ranked at position 23 among 47 countries in the Sub-Saharan Africa region, and its overall score is approximately equal to the regional average and well below the world average.

Kenya is the 137 least corrupt nations out of 180 countries, according to the 2019 Corruption Perceptions Index reported by Transparency International.

''The poor investment regime lacks efficiency and transparency, discouraging investment activity. The financial sector remains vulnerable to government intervention,’’ the report said.

East Africa’s economic powerhouse saw it's business and labour freedom drop slightly to 55 and 55.8 per cent respectively from 60 and 62. The ease of tax dropped to 78.7 per cent from 82 per cent last year.

The country’s trade, investment and financial freedom stagnated at 60.4, 55, and 50 per cent respectively.

According to the Washington based think tank, while Kenya seeks to alleviate structural obstacles to more rapid economic growth and to prioritize trade liberalization, policymaking and implementation remain vulnerable to such risks as drought, insecurity, corruption, and political squabbling.

Even so, this year’s overall index rose 0.2 points with considerable improvement in monetary freedom, government spending, property rights and judicial effectiveness.

It however trailed Rwanda, Tanzania and Uganda, which were ranked at positions 32, 89 and 102 globally in that order.

Mauritius, Rwanda and Botswana are the most economically free countries in Africa, with high indices of 74.9 per cent, Rwanda 70.9 per cent and Botswana 69.6 per cent.

Globally, Singapore maintained its top position globally with an economic freedom score of 89.4, making it the world’s freest economy in the 2020 Index. 

The Asian tiger is followed by Hong Kong at 89.1 per cent while New Zealand came in that with a score of 84.1 per cent.

The report defines economic freedom as the fundamental right of every human to control his or her own labor and property.

In an economically free society, individuals are free to work, produce, consume, and invest in any way they please.

In economically free societies, governments allow labor, capital, and goods to move freely and refrain from coercion or constraint of liberty beyond the extent necessary to protect and maintain liberty itself.

The ideals of economic freedom are strongly associated with healthier societies, cleaner environments, greater per capita wealth, human development, democracy, and poverty elimination.