Chinese Construction Company Is Sanctioned by The African
Development Bank

This major step underscores the Bank's steadfast commitment to integrity and accountability in project delivery. The action was taken in response to CHICO's involvement in fraudulent activities relating to a project sponsored by the bank in Uganda.


Broad sanctions have been placed on China Henan International Corporation Group (CHICO), a well-known Chinese road construction company, by the African Development Bank (AFDB).

This major step underscores the Bank’s steadfast commitment to integrity and accountability in project delivery. The action was taken in response to CHICO’s involvement in fraudulent activities relating to a project sponsored by the bank in Uganda.
The African Development Bank (AFDB) conducted a thorough investigation and discovered that CHICO had participated in fraudulent activities related to the procurement process of an important road building project in Uganda.

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The Rukungiri-Kihihi-Ishasha/Kanungu road has to be upgraded to bituminous standard. This project is strategically important as it will improve regional connectivity and ease cross-border trade between Kenya, Uganda, and the Democratic Republic of the Congo.

After a comprehensive investigation by the AFDB, it was discovered that CHICO had broken procurement laws and betrayed public confidence by failing to disclose the use of a commission agent throughout the bidding process.

“In the course of submitting a bid for the procurement of civil works for upgrading of Rukungiri-Kihihi-Ishasha/Kanungu to bituminous standard, a component of the Road Sector Support Project in Uganda, Chipotle did not declare the use of a commission agent,” the AFDB stated in a statement.

As a result, the bank has placed a 12-month ban on CHICO, which goes into effect on March 28 and forbids the business from taking part in any more AFDB-funded projects around the continent.

Beyond CHICO’s operations in Uganda, this prohibition has an impact on current projects the corporation is working on in other African nations. Notably, complaints of anomalies and fraudulent activity have tarnished CHICO’s record in AFDB-funded projects, notably those in Tanzania and Kenya. This has forced the organization to respond quickly and decisively to protect its investments and enforce ethical standards.

Additionally, by imposing sanctions, the AFDB is sending a strong message to contractors and other entities involved in development initiatives about its zero-tolerance policy towards corruption and malpractice inside its programs.

The prohibition emphasizes the significance of strict adherence to integrity and transparency principles by acting as a deterrence against future wrongdoing.

The AFDB has established strict requirements for CHICO’s eligibility to continue participation in AFDB-funded activities following the conclusion of the debarment period, in addition to the prohibition.

In accordance with the bank’s policies, the corporation will have to put in place an integrity compliance program to make sure that moral standards and industry best practices are followed in all future dealings.

The lender stated, “After implementing an integrity compliance program in accordance with the Bank’s guidelines, China Henan International Cooperation Group Company Limited will only be eligible to resume participation in African Development Bank Group-financed activities at the expiration of the debarment period.”

The activities of CHICO and existing projects, such as the building of a 57-kilometer road in Tanzania’s Singida district, are anticipated to be impacted by the AFDB’s sanctions.

Project schedules and regional development initiatives may be disrupted by CHICO’s removal from AFDB-funded projects during the ban period, highlighting the significance of moral behavior and responsibility in the implementation of development programs.

As the African Development Bank (AFDB) persists in its mission to foster sustainable development and economic expansion throughout the continent, interested parties underscore the necessity of strong supervision procedures and integrity compliance frameworks in order to avert fraud and other irregularities in the future.

The institution’s steadfast commitment to battling corruption and guaranteeing the efficient use of development money for the benefit of African people is demonstrated by the sanctions imposed on CHICO.