By Ebi Kesiena
The African Development Bank (AfDB) has disclosed that a $55mn integrity fund launched seven years ago has still not been put into operation and has not disbursed any money on its stated anti-corruption purpose.
According to Financial Times, Non-governmental organisations that have applied for grants from the fund, initiated in November 2016 as a way of combating corruption in Africa, have been told it is not yet up and running.
When the AfDB’s board approved the Africa Integrity Fund, the then director of the bank’s integrity and anti-corruption department, Anna Bossman said it would be funded with $55.25mn collected from companies that had settled alleged corruption or misconduct cases with it.
The fund would disburse grants to African enforcement agencies, tax authorities, educational institutions and civil society groups involved in fighting corruption, it said.
“We are confident that the AIF will become a model for others,” Anna Bossman, then director of the bank’s integrity and anti-corruption department, Bossman said at the time.
The AfDB confirmed to the Financial Times that the integrity fund had never been put into operation and that no grants had been made.
“The Africa Integrity Fund was not operationalised to mitigate risks regarding conflict of interest, transparency and due process which were identified during the process of implementation,” it said.
Expers have however noted that failure to deploy the money, collected from companies that settled alleged corruption cases with the Abidjan-based development bank, could raise questions about the efficiency of an institution through which western governments channel billions of dollars to development projects.
In addition to its 54 African member countries, the triple-A rated bank has 27 non-regional members, including the UK, Japan, China and the US, its second-largest shareholder after Nigeria. The AfDB has access to authorised capital of $250bn, money available to be disbursed to infrastructure, power, agriculture and other projects.
What The AfDB Is Saying About The Integrity Fund
The AfDB had decided that the funds should be managed by an external body to prevent commingling of funds with bank resources.
“Management has identified an independent institution to deploy the funds. The proposal to formally close the Africa Integrity Fund (which requires a board resolution) and appoint the independent institution will shortly be submitted to the board of directors for approval,” it said, without specifying the institution.
The AfDB did not explain why it had taken seven years to seek alternative arrangements, but said it had followed “customary and prudent” procedures for the implementation of any new initiative.
The $55.25mn had been kept in a separate, interest-bearing account and was now worth $57.03mn, it said. The fund was “intact 100 per cent”, a senior executive at the bank said.
The money to establish the fund came from international companies investigated by the bank. One substantial penalty was paid by Hitachi in 2015 after a probe into what the AfDB called “sanctionable practices” in pursuing a power plant contract in South Africa, though the exact sum has not been made public.