The business sector is crying out for help.
Many enterprises are operating on the edge because the business environment is tough and continues to challenge even the shrewdest entrepreneurs and executives.
One crisis that has persisted for years is the never-ending accumulation of bills for goods and services delivered but not paid for.
Suppliers are starved of their dues, while a few rotten apples are reaping where they haven’t sown and using the ill-gotten gains to finance their protection.
It’s campaign time and the government needs to worry about the destination of the billions of shillings stolen from commercial public and private enterprises every year.
A rigorous study can give a fair estimate of how much of the commercial debt and losses can be attributed to corruption and outright fraud.
Quite a few firms have experienced serious fraud, which has eaten into profitability and crippled their capacity to service their debts.
They include Kenya Airways, whose losses since 2015 have shaken the airline industry.
By March, ‘the Pride of Africa’ had current liabilities of Sh71.3 billion, including the debts the airline hasn’t paid to suppliers.
At the end of the 2016 trading year, the amount classified as trade and other payables amounted to Sh34.4 billion, up from Sh10.3 billion at the end of the 2012 trading year.
Mumias Sugar Company is another classic case of corporate failure.
By June 30, last year, it hadn’t paid suppliers Sh8 billion, and given that its annual turnover was Sh6.3 billion, it needed more than the equivalent of a year’s trading just to settle its debts.
Suppliers of Nakumatt Holdings, the largest supermarket chain, and its competitor, Uchumi, are experiencing similar hardships.
Uchumi, which is hanging on a thin thread, reported current liabilities of Sh6.5 billion in the last published accounts of the year ending June 30, 2016.
The debts were more than its turnover of Sh6.4 billion, or half its 2015 turnover of Sh12.9 billion.
Such huge liabilities create a long chain of debt because firms that aren’t being paid are also unable to pay suppliers.
It also forces firms to increase their short-term borrowing to survive what they imagine is a temporary situation.
The debt chain has a devastating impact on the economy.
Ironically, the debts aren’t the result of normal business failures, but include losses from systemic leakages, particularly from procurement, and weaknesses in corporate governance.
The business sector has failed to enforce a code of ethics that includes obligations to all to pay employees and suppliers in time.
Small businesses, particularly, need access to opportunities and timely payments.
In corruption, it takes two to tango. The business community needs to fight the cancer and expose peers engaged in cartels.
This is necessary to curb the use of proceeds of crime and money laundering to fund terrorism and destabilise governments.
The Ethics and Anti-Corruption Commission and the Financial Reporting Centre should be hot on the heels of corruption and money laundering networks.
The investigators should particularly be interested in individuals running for public office, who are suspected of looting enterprises and the cartels involved in campaign financing.
Such people invest in elections to serve their interests, such as influencing government contracts.
These people and interest groups are dangerous because by controlling the political system, they gain the power to control economic policy—which is not necessarily for the common good.
There’s a good record of how much influence the Goldenberg, Anglo Leasing and other cartels have exerted on government policy.
Have we not learned from the classic case of a Finance minister amending the law to waive duty on sugar imports just in time for cartels to offload their cargo in the local market when all local firms have been ordered to shut down for maintenance?
This time, it shouldn’t be allowed to happen. Otherwise, the business community, the economy and the people will bleed for the next five years.