Now, though, it's making progress against the old-fashioned scourge through new-fangled IT. The solution is simple, but powerful: Remove bureaucrats through "e-government."
"We started asking, How can we reduce the human interaction between businessmen and state workers, so we can reduce corruption?" says Jane Joram, senior deputy registrar general at the Company Registrar Office. "Now you can file your application online and you can pay online. That means no more bribes."
Just a few years ago, business owners who wanted to start a company in Kenya would have to line up for hours just to get into the building at the Company Registrar Office in the capital, Nairobi.
A relic of British colonial rule, the registrar seemed designed to cow a citizen into submission, with 10 windows manned by surly civil servants up front, and behind them a second line of senior clerks, processing stacks of registration applications at a pace of their own choosing.
Delay tactics – demanding extra documents, or claiming the office lost a person's application – were usually a ruse for bribe money, and they meant that it could take a staggering 21 days just to register a company's name.
Today, a computerization project has cut that process to just five days, making Kenya more attractive to foreign investors.
Kenya has its work cut out for it. And there are other African countries, such as Rwanda and Mauritius, that are well ahead of Kenya in making themselves ready for business. But at a time when sub-Saharan Africa is one of the few bright spots on the global economy – growing at an overall 5.7 percent rate by June 2011, with countries such as Angola and Nigeria growing at 8 percent – Kenya is making economic reforms at a time when the world's investors are increasingly looking for better places to invest.
"Part of the reason people pay bribes is because it took forever to register a company or do any of the other bureaucratic processes," says Samuel Kimeu, executive director for Transparency International in Kenya. "But when we make government processes automated, such as [getting] birth certificates, licenses, company registrations, IDs, I'm sure the impact will be immense in reducing corruption."
Kenya is just one of 24 African countries turning to e-governance. Rwanda, judged the least corrupt country in Africa and one of the best places to do business, is a pioneer in e-government. This year, Rwanda won its third Technology in Government in Africa award, for its efforts to give rural citizens access to information on health care, food prices, and crop prices.
Despite improvements on Transparency International's bribe-payer's index this year, Kenya's overall ranking in the World Bank's Ease of Doing Business index of 183 nations fell this year to No. 109, from 106 just a year ago.
Old rules governing who can own property, time-wasting applications from stodgy government offices, and yes, corruption, make Kenya a much more difficult place to do business than even Kenyan officials want it to be. And the agency that should help keep people obeying the laws, Kenya's police, appear to be the country's most corrupt institution of all, according to Transparency International.
But experts say that when it comes to e-government, Kenya is moving ahead. In an agency like the Company Registrar Office, corruption was a logical symptom of a paper-filing system that had simply ceased to function.
"Everything was in a mess," says Ms. Joram, the deputy registrar. "We had accumulated thousands of files, and we had so many cases of lost files, and the staff would just say, 'Yes, come back tomorrow.' And some people would say, 'Wait.' And they would give money for a bribe."
But starting in July 2010, Joram's agency has digitized more than 750,000 case files, more than 25 million pages. With a few keystrokes, clerks can find files in minutes, instead of hours. By the beginning of November, Joram hopes her office will be nearly paperless.
"We have to deal with corruption, we have to deal with fraud, and we want to stay ahead of the problem as much as we can," she says. "I think we are on the right track, because we cannot do otherwise."