African Development Bank Faces Diplomatic Incident and Alleged Fraud Case in Ethiopia

The African Development Bank (AfDB) is dealing with two significant challenges in Ethiopia: a diplomatic incident resulting in the withdrawal of international staff and an alleged $6 million fraud case.

Diplomatic Incident: Withdrawal of International Staff

The AfDB’s Ethiopian office has been disrupted due to the sudden departure of international staff following an incident on October 31, 2023. Two AfDB employees were physically assaulted by Ethiopian security officers, leading to diplomatic tension:

• International staff members have been sent home, but existing Ethiopian staff remain under contract.
• An officer-in-charge oversees the Addis Ababa office, while international staff work remotely from outside Ethiopia.

Investigation into Alleged $6 Million Fraud

Simultaneously, Ethiopian authorities are conducting an investigation into a reported $6 million fraud case related to funds earmarked as the Ethiopian government’s contribution to the AfDB:

• Officially, the Ethiopian government acknowledged transferring $6 million, while the AfDB believed the sum was just $5.2 million.
• An altercation between an AfDB senior economist and Ethiopian officials over the authenticity of the bank account led to the diplomatic incident.
• The missing $400,000 reportedly ended up in Latin America.

Timeline of Events

• The AfDB identified an issue with a $5.2 million deposit, representing Ethiopia’s annual contribution to the bank.
• Ethiopian officials claimed the transferred amount totaled $6 million.
• An altercation ensued when senior AfDB economist Abdul Kamara, the Ethiopia Country Manager, questioned the authenticity of the associated bank account.
• Prime Minister Abiy Ahmed and Finance Minister Ahmed Shide intervened, with AfDB President Dr. Akinwumi Adesina leading a high-level delegation to discuss the matter with PM Abiy on November 22.
• Despite intervention, tensions remain high, and there are growing concerns among stakeholders about the safety of AfDB employees in Ethiopia, potentially jeopardizing the bank’s operations in the country.

Current Situation

• Ethiopia has yet to publicly respond to the reports of the incident or the investigation.
• The AfDB awaits further details and clarification on the incidents, which could potentially impact the relationship between Ethiopia and the African Development Bank.