AfDB’s $55m anti-corruption fund left dormant for years

The African Development Bank (AfDB) has disclosed that a $55 million integrity fund, established seven years ago to combat corruption in Africa, remains inactive and has not disbursed any funds for its intended purpose. The fund, initiated in 2016 with the aim of curbing corruption on the continent, has yet to be operationalised, raising concerns about the efficiency of the institution responsible for distributing billions of dollars from Western governments to development projects in Africa.

Although NGOs have applied for grants from the integrity fund, they have been informed that it is not yet functional. The fund was intended to be financed by $55.25 million collected from companies that had settled corruption or misconduct cases with the AfDB. The bank has the authority to investigate allegations of corruption related to projects it has financed.

The proposed usage of the fund was to offer grants to African enforcement agencies, tax authorities, educational institutions, and civil society groups engaged in anti-corruption efforts.

The AfDB, which holds a triple-A rating, has access to an authorised capital of $250 billion for disbursement to projects in sectors such as infrastructure, power, and agriculture.

Critics have expressed surprise and disappointment at the AfDB’s inaction, given the substantial funds and the critical role of combating corruption across the continent. The AfDB has defended its decision to not activate the fund, citing concerns about transparency, due process, and potential conflicts of interest.

The bank has confirmed that an external entity will be tasked with managing the funds, and a formal proposal for the fund’s closure and appointment of the external institution will be submitted to the board of directors for approval.

The AfDB’s approach to utilising fines for anti-corruption efforts has faced scrutiny, and the inactivity of the integrity fund adds to questions surrounding the bank’s effectiveness in promoting transparency and accountability in development projects.

The AfDB’s governance was previously questioned in 2020 when allegations of procedural violations and preferential appointments were raised against the bank’s president, Akinwumi Adesina. An independent panel ultimately cleared Adesina of misconduct, and he was re-elected for a new term.