When Kenya’s Ministry of Lands and Physical Planning decided to digitize parts of their operations that involved cash payments, the revenue generated annually increased from KES 800 million to KES 9 billion. That is a whopping 1,125% increase.
How did the magic happen?
Digitization of their processes and records had closed corruption loopholes and revenue leakages, making it mandatory for everyone to pay for services, as well as well as ensuring that money paid for services ended up in government coffers.
The data from the ministry points to something that can really help in curbing corruption and streamlining government operations in Kenya. In fact, the biggest winner here is the Kenyan government which is almost panicking over lost revenue and missed revenue targets, against a huge budget deficit.
How big is the corruption problem?
Factors fuelling corruption
Any situation that requires human interaction is susceptible to corruption. People will learn that they can get services faster if they bribe the one offering the services to give them a preferential treatment. The service provider also knows that if they deliberately slow down the services, there will be more people ready to pay money to get served. This is the main source of corruption in Kenya, and many parts of Africa.
The other factor that fuels corruption is use of cash payments. Whenever money is moved through people’s hands, very many controls are needed to ensure that the full amount gets to the intended recipient. This provides a loophole for corruption, and the end is loss of government revenue.
In many cases involving cash payments, you can never be guaranteed that the money you pay ends up with the government, or in someone’s pocket. This is the case even if you get a seemingly authentic receipt.
Solving the corruption problem
Take the example of traffic offences. If you are found over speeding in Kenya, you have the option of paying the traffic police officer some bribe so that they can let you go, or you will have to wait for half a day as they take you to court so that you can pay the fines. The people who are willing to pay the fine do not have a whole day to waste, and they start counting the unnecessary cost associated with their desire to follow the law. This motivates people to offer the bribe.
What if there are automated fine payment system, with stipulated amount for each offence?
The most likely outcome is that people will pay their fines and be on their way. It also means that the police officers will not handle any cash, and any transaction with them involving money would be suspicious.
How digitization has helped
Automation of various government services in Kenya has helped tackle the associated problem of corruption.
The Huduma Centers all over Kenya give access to government services in an open and a transparent way, making it harder for hidden demands to be raised. Services like application of passports which is now done online has seen reduction in corruption activities that were associated with it. It is also made it easier for citizens since they do not need intermediaries, but can access the well laid out procedures for application.
The government thus needs to get more of its services online, and automate all forms of revenue collection. In a country where mobile money penetration is very high and everybody can manage at least to make some cashless payment, the government can take this opportunity to deal with the duo problem of corruption and revenue loss.