3 days ago
AfDB flags East Africa for procurement fraud in projects
East Africa has been flagged as a hotspot for procurement fraud and other sanctionable practices in African Development Bank (AfDB)-funded projects, driven by a surge in the bank's financing to the region.
The pan-African lender's Office of Integrity and Anti-Corruption (PIAC) investigated 59 cases of sanctionable practices in 2024, of which 19, or a third, were in East Africa.
Sanctionable practices are corrupt, fraudulent, coercive, or obstructive actions done in relation to any of the bank's funded projects, and may often lead to sanctions like temporary or permanent debarment of companies or individuals involved.
The PIAC report blames the vices on increased funding from the lender in the region, especially in transport and energy projects.'PIAC examined the distribution of cases across different regions, revealing a large concentration of procurement fraud cases in the East Africa region,' AfDB said in its annual report.'This concentration can be attributed to the Bank's substantial investments in the East Africa region. This substantial investment in the East Africa region is an attractive target for fraudsters.'
The region is followed by Central Africa, which recorded 12 such cases, followed by Southern Africa with 11 cases and West Africa with seven. The headquarters in Abidjan, Cote d'Ivoire, investigated seven such cases, while the Northern Africa region had none.
While several actions fall under the sanctionable practices category, they are dominated by procurement fraud, which last year constituted 81 percent of the investigated cases, some of which led to sanctions such as debarment.
Procurement fraud is where bidders use falsified, forged or misrepresented documents in their bids to unfairly get contracts in projects.
The majority of the cases were in the transport sector, which accounted for 41 percent of the investigated cases. Others were in water and sanitation, energy and power, and agriculture.
The bank does not disclose the specific cases it investigates.
In East Africa, one company with ongoing road projects in Kenya, Uganda, Tanzania, and Rwanda, was debarred for engaging in procurement fraud in an AfDB-funded road construction project in Uganda.
When a firm is debarred by the bank, it cannot participate as a contractor in any project funded by the bank or any other international development financiers such as the World Bank Group, the Asian Development Bank, and the Islamic Development Bank.
The investigation also noted a surge in other integrity issues and malpractices, including a 'notable increase' in staff misconduct in East Africa last year, but the headquarters and Southern Africa, which have the highest number of staff, had more cases,16 and 11 respectively, against East Africa's four.
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