Fifteen Nigerian companies working with the African Development Bank (AfDB) and the World Bank have been blacklisted by both financial institutions. Meanwhile, nine individuals have also been indicted over several procurement malpractices.
The pan-African bank this week disclosed that it had debarred Lutoyilex Construct Limited, a construction company registered in Nigeria, as well as the company’s Managing Director, Bamidele Obiniyi. The debarment stands for 36 months (May 5, 2019, to May 13, 2022).
Lutoyilex allegedly engaged in fraudulent practice while bidding for a construction contract under the AfDB-funded Agricultural Transformation Agenda Support Program Phase One (ATASP-1) in Nigeria, the bank’s Office of Integrity and Anti-Corruption found in an investigation.
“While participating in a tender for the construction of social infrastructure in Niger State, the company, misrepresented its experience in conducting similar construction contracts,” the AfDB said. “The debarment renders the company and its managing director ineligible to participate in Bank-financed projects during the debarment period.”
As explained by the AfDB, sanctions are usually imposed on entities found to have participated in coercive, collusive, corrupt, fraudulent or obstructive practices under the Bank’s sanctions system or adopted under the Agreement for Mutual Enforcement of Debarment Decisions.
“Flowing from its mandate, the Bank Group has a fiduciary and legal duty to ensure that funds are used for the purposes for which they were intended,” the Bank said of its sanction regime. Thus, where firms or individuals divert these funds to other uses through fraud, corruption and associated harmful practices, the Bank Group exercises its duty by sanctioning these entities through an administrative process.
Moreover, Lutoyilex is just one of 15 Nigerian firms that have recently been sanctioned by both the World Bank and the AfDB for sharp practices, Premium Times reported. And apart from Obiniyi, there are other eight Nigerian nationals currently serving debarment terms for corruption-related offences.
Whereas Lutoyilex and its managing director are accused of misrepresenting their company’s experience during a procurement process, the specific crimes committed by the other 14 companies and eight individuals remained unclear. However, the wrongdoings are all reportedly related to fraud.
Although the debarment is by the African bank, it qualifies for cross-debarment by other multilateral development banks under the Agreement for Mutual Recognition of Debarment Decisions. Thus, companies blacklisted cannot engage in any business with similar institutions – the Asian Development Bank, the European Bank for Reconstruction and Development, the Inter-American Development Bank and the World Bank Group. The affected parties remain ineligible for the periods stipulated against their names.
The Nigerian companies and individuals now belong to a group of 912 firms and personalities across the world who remain temporarily prohibited from bidding for contracts by multilateral development banks.