ADB’s hammer

•The bank’s sanctions system provides a template for stopping corruption in its tracks

African Development Bank (AfDB) has announced the ban of ALG Global Concept Nigeria Limited, whose managing director is Abuharaira Labaran Gero, from participating in bank-financed projects for 36 months. An investigation conducted by the bank showed that ALG Global Concept had presented a false bid security for construction of social infrastructure in Niger State, under the Agricultural Transformation Agenda Support Programme Phase One in Nigeria (ATASP-1). The company has been found sanctionable for fraudulent representation of  its experience in conducting such projects.

With this decision, the company is liable to be debarred from contract bidding by other multilateral development banks which are signatories to the 2010 Agreement for Mutual Enforcement of Debarment Decisions. The International Financial Institutions (IFIs) include the African Development Bank, Asian Development Bank, European Bank for Reconstruction and Development, Inter-American Development Bank, and the World Bank Group.

The bank’s communication and external relations department has explained that an investigation conducted by the bank’s office of integrity and anti-corruption has established that ALG Global Concept had engaged in numerous acts of fraud in bidding for a construction contract expected to be awarded by the bank. The Office of Integrity and Anti-Corruption of AfDB is responsible for preventing, deterring and investigating allegations of corruption, fraud and other sanctionable practices in the bank’s group-financed operations.

As embarrassing as the decision of AfDB may be for a country that has virtually become synonymous with corruption internationally, the sanction should provide a good lesson for individuals and corporate bodies in Nigeria that thrive on cutting corners. The decision of the bank should also put smiles on the faces of those with the remit to fight corruption in Nigeria.

AfDB’s quick detection and sanctioning of a potential contractor that has submitted a ‘padded’ bid provides a good model for countries in Africa that have set out to fight corruption. And Nigeria ought to take advantage of this culture of proper corporate governance. AfDB’s rigorous enforcement of the principle of due diligence should be a pointer to the fact that the absence of ethical corporate practice that many individuals and companies have been used to in their own country is not tolerated elsewhere.

For example, lackadaisical approach to allegations of unethical practices by Siemens, Halliburton, and even local investigations of allegations of fraud in the pension system and Nigeria’s health insurance system could have borrowed effective methods for  corporate governance from the bank’s   sanctions system. The speed of response of the administrative regime for sanctioning individuals and companies before they commit crimes that could cost more money to investigate and prosecute is particularly commendable.

AfDB’s emphasis on preventing corruption from happening is a good lesson for Nigeria in its agenda to fight corruption. It is also a reminder that the conduct of ALG Global Concept of Nigeria is quickly frowned upon elsewhere, more quickly than in Nigeria where there seems to be lingering tolerance for unethical practices. The example of rigorous due diligence before contracts are awarded or procurements are made can save governments a lot of resources devoted annually to fighting corrupt cases, mostly after the harm of corrupt practices has been done.  African Development Bank’s sanctions system that emphasises independent investigation and quick administrative dispensing of sanctions deserves the attention of regimes that are committed to fighting corruption in public and private sectors. Furthermore, the debarment for three years of ALG Global Concept from using fake credentials to gain access to utilisation of funds for development projects illustrates the significance of early detection of fraud that can prevent or frustrate the commission of crime.

Nigeria ought to take a cue from AfDB’s strategy of nipping in the bud corrupt acts at their incipient stage, if our country is to gain more mileage in the fight against corruption. We call on the Federal Government to take special notice of a company that has set out to embarrass the country by drawing negative attention to Nigeria’s Agricultural Transformation Agenda Support Programme Phase One.