Why Trump is demanding AfDB clean-up as Kenya's loan billions expose graft

A confidential US Treasury report has demanded an urgent governance overhaul at the African Development Bank (AfDB).

The new report reveals that 83 per cent of AfDB’s sanctioned cases involved fraud, with Kenya identified as both a top beneficiary of loans and a primary source of corruption complaints.

The July 2025 internal document authored by the Trump administration and obtained by Financial Standard, directs new AfDB President Sidi Ould Tah—who assumes office today—to immediately “strengthen audit, evaluation, integrity and redress units” and reform procurement systems.

This follows a troubling 19.5 per cent year-on-year surge in integrity complaints across the bank’s operations.

“The United States will work with the new president to advance priorities, including reforming the bank’s procurement policies to ensure value-for-money,” the report by the Trump administration states, making future American support conditional on demonstrable improvements in “governance, effectiveness, and impact.”

Mauritania’s former Economy Minister Sidi Ould Tah was in May this year elected to succeed Nigeria’s Akinwumi Adesina as president of the AfDB and is set to tackle the withdrawal of US financing from the institution.

Tah, who headed the Arab Bank for Economic Development in Africa (BADEA) for 10 years, secured 72 per cent of African votes.

He thanked “Africa for the trust” placed in him, adding: “I am fully aware of the responsibility and duty that come with it.”

In his pitch for the AfDB leadership, he vowed to strengthen regional financial institutions, assert Africa’s financial independence on global markets, use population growth as a development lever and build climate change-resistant infrastructure.

The AfDB, founded in 1964, is one of the world’s largest multilateral development banks. It is funded by member subscriptions, loans raised on global markets, as well as repayments and income from loans.

Kenya, the AfDB’s fourth-largest borrower, now stands squarely in the spotlight.

Electricity highway

While the country received billions of shillings in critical infrastructure funding in 2024—including for major projects like the Ethiopia–Kenya electricity highway—internal bank data confirms it has also become a significant epicentre of fraudulent activity.

In mid-August, the AfDB’s own Office of Integrity and Anti-Corruption (PIAC) reported that fraud made up 83 per cent of all sanctioned cases last year, noting “a notable continuous trend” of corruption allegations.

In response, the bank has taken unprecedented steps to shore up accountability, including hiring external quality assurance experts to directly scrutinise Kenyan bidders—a move designed to “identify and eliminate potential graft loopholes before funds are disbursed.”

This action came on the heels of a series of debarments of Kenyan companies, which are now barred from AfDB-funded projects. Such sanctions also trigger automatic cross-debarment by other multilateral lenders such as the World Bank and the Asian Development Bank, effectively exiling firms from the entire international development marketplace.

For Kenya, the crackdown presents a dilemma. The country depends heavily on AfDB financing for essential infrastructure—including energy, transport, and water projects and heightened scrutiny could delay urgently needed developments.

Yet a destabilised or discredited AfDB also threatens Kenya’s long-term interests as a major shareholder and repeat beneficiary.

The stakes are especially high now as the AfDB seeks a general callable capital increase to preserve its AAA credit rating—a measure requiring US approval.

Washington has made it clear that continued American support depends on the bank adopting stricter anti-fraud controls and procurement systems that deliver “true value for money.”

With the Trump administration now publicly demanding accountability and a new president taking the helm, the era of lax oversight at the AfDB appears to be over. 

How Kenya navigates this new landscape—balancing immediate project needs against mounting international pressure for transparency—could shape its development trajectory for years to come.

The AfDB or the Trump administration did not respond to a request for comment by The Standard outside regular business hours.