Zim among African countries with highest fraud

HARARE - Zimbabwe has been ranked third out of the top four African nations with the highest cases of fraud, according to global audit group KPMG’s Africa Fraud Barometer.

In the Barometer, KPMG said findings revealed South Africa has the highest number of fraud cases closely followed by Nigeria, Zimbabwe and Kenya in fourth position.

The value of cases fell to $2 billion from $3,3 billion with the four countries accounting for 74 percent.
According to the barometer, sectors with the highest risk of fraud are government with 55 percent, financial services with 18 percent and consumer markets at seven percent.

This is KPMG’s second Africa Fraud Barometer. The initiative was launched in April this year and is an early stage effort to measure fraud on the continent.

It also tries to expose the risk of fraud to companies in their day-to-day operations.

The Barometer distinguishes between the number of reported fraud cases, type of perpetrators, victims of fraud, type of fraud, countries and targeted industries.

Data currently available captures the entire year of 2011 and the first half of 2012. To obtain some indications of trends, findings from the first six months of 2012 were compared to those ones of the second half of 2011.

However, KPMG said business had stepped up awareness of fraud and fraud prevention through workshops.
Despite Zimbabwe featuring in the top four, the report reflects a fall in fraud cases from 520 in the same period last year to 503 this year.

But, it indicates that Harare is lagging behind in dealing with fraud cases, especially in the absence of a targeted response.

“While fewer cases are reported in South Africa, the overall value of these cases is far greater in Nigeria,” said KPMG.

“… we have noticed a decline both in terms of reported fraud cases and their monetary value. We see this as a positive trend,” KPMG.

There is an increasing interest in Africa as an investment destination, but investors’ interest is dampened by the continent’s image.

“We are providing an analysis of fraud profiles in individual African countries to foreign investors since a generic approach to assessing fraud risks on the continent is not possible. The overriding point is that investors need to assess the prevailing environment in each country,” KPMG said.

Available data captures the entire year of 2011 and the first half of 2012. To obtain some indications of trends, findings from the first six months of 2012 were compared to those of the second half of 2011.

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