KPMG released the findings of the second Africa Fraud Barometer. The initiative was launched in April 2012 and is an effort to measure fraud on the African continent and expose the risk of fraud and corruption faced by companies in their day-to-day operations. The Africa Fraud Barometer has been developed to provide insight on the fraud prevalence on the African continent for sub-Saharan Anglophone countries.
The Africa Fraud Barometer clearly identifies that investors and corporates must guard against generalisations when it comes to levels of fraud and corruption in African countries. The survey, which can be found on KPMG.co.za, reflects that the reported incidents of fraud and corruption vary significantly from country to country. This emphasises the need to be country specific when assessing the fraud and corruption risk when doing business on the continent. The risk profiles of each country are distinct with some appearing to be effective in managing fraud and corruption.
According to the results of the survey a positive trend is evident in a decrease in the number of reported cases of fraud, from 520 in the second half of 2011 to 503 cases in the first half of 2012. In the same period, the value of fraud decreased from US$3.3 billion to US$ 2 billion.
Nigeria, Kenya, Zimbabwe and South Africa make up 74 percent of all fraud cases reported, and are the countries with the highest number of reported cases. While fewer cases are reported in South Africa, the overall value of these cases is far greater in Nigeria.
There is an increase interest in Africa as an investment destination, but the continent continues to struggle with a negative image in relations to fraud and corruption. However, a generic approach to assessing fraud risks on the continent is not conducive and. investors need to assess the prevailing environment in each country.
The survey identifies government as a high risk area both in terms of perpetrator and victim. It would seem from the statistics that government is under attack from its own people.
The data for the Africa Fraud Barometer is compiled by analysing available news articles and reviewing fraud cases from designated databases. Updates are disseminated by press release every six months.
Download the report