The African Development Bank (AfDB) has imposed a one-year ban on Chinese construction firm China Henan International Corporation Group (Chico) for “fraudulent activity” in a Ugandan road project funded by the bank.
The ban, effective March 28th, 2024, bars Chico from participating in any new AfDB projects across Africa, including an ongoing project in Kenya.
The AfDB investigation revealed that Chico failed to disclose using a commission agent during their bid for the Rukungiri-Kihihi-Ishasha/Kanungu road upgrade project in Uganda.
This project is critical for regional integration and trade with neighboring countries.
This is not the first time Chico has faced accusations of wrongdoing.
The company has road projects in Kenya, Tanzania, and Uganda funded by various institutions, including the AfDB, World Bank, and local governments.
In 2022, Chico abandoned the AfDB-funded Kisii-Isebania road project in Kenya after demanding payment arrears.
Additionally, the company faced legal trouble in Kenya in 2019 for allegedly forging land leases and illegally obtaining soil.
Despite these issues, Chico is currently constructing a road in Tanzania.
The AfDB has recently intensified its efforts to combat fraud in its funded projects.
Last year, the bank banned five companies, including a Kenyan firm, for corruption during a highway tender process.
The year-long ban on Chico applies to the company and its affiliates, including leadership and subsidiaries.
After the ban period, Chico can only participate in AfDB projects again if they implement a compliance program that adheres to the bank’s guidelines.
