Summary:

• The African Development Bank has banned Chinese road builder Chico for fraudulent activity in a Uganda project. Chico is barred for 12 months from new AfDB-funded projects across Africa.

The African Development Bank (AfDB) has imposed a ban on China Henan International Corporation Group (Chico), a Chinese road construction company, citing “fraudulent activity” in a project funded by the bank in Uganda.

Effective March 28, the ban on Chico, based in Henan, will last for 12 months. During this period, Chico is prohibited from engaging in any new projects funded by AfDB across the continent, including ongoing projects like the one in Kenya.

An investigation by AfDB revealed that Chico failed to disclose its use of a commission agent while submitting a bid for a tender related to the upgrading of the Rukungiri-Kihihi-Ishasha/Kanungu road project in Uganda. This project, vital for promoting regional integration and cross-border trade with neighboring countries like the Democratic Republic of the Congo and Kenya, spans the southwestern and eastern regions of Uganda.

Chico, which has road projects in Kenya, Tanzania, and Uganda, funded by various entities including AfDB, World Bank, and local governments, has faced scrutiny in the past. In 2022, it abandoned an AfDB-funded project in Kenya due to payment disputes, and in 2019, the company faced legal charges in Kenya for alleged forgery and fraudulent land acquisition.

In Tanzania, Chico is currently involved in constructing a 57-kilometer road in the Singida region.

AfDB has been actively debarring companies found involved in fraudulent activities in projects it finances. Last year, it banned five companies, including a Kenyan firm, for corruption related to a highway project in Kenya.

Following the 12-month ban, Chico and its affiliates will be ineligible to participate in AfDB-financed activities. However, the company can regain eligibility by implementing an integrity compliance program in line with AfDB’s guidelines after the ban period ends.