Kenya Abuse Scandal Rocks World Bank, IFC

Welcome to Foreign Policy’s Africa Brief.

The highlights this week: Bassirou Diomaye Faye is elected president as Senegal’s opposition wins outright victory, Nigeria charges detained Binance execs, and the UAE seeks to buy another Zambian copper mine.

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World Bank chief Ajay Banga apologized earlier this month for the organization’s handling of widespread child sexual abuse at a chain of for-profit Kenyan schools that it funded through the International Finance Corporation (IFC), the bank’s investment arm.

The IFC invested $13.5 million in Bridge International Academies starting in 2013 to help it scale up private schools in Kenya. Multiple complaints of sexual abuse emerged in 2020 following an investigation by the IFC’s internal watchdog, the Compliance Advisor Ombudsman. The watchdog’s final damning 58-page report, submitted last October and published March 14, found that the bank had failed to address and mitigate the abuse perpetrated by staff at Bridge.

In an email to the staff of the World Bank sent March 13, Banga, whose tenure began after the period of reported abuse, acknowledged that mistakes were made.

“I am sorry for the trauma these children experienced, committed to supporting the survivors and determined to ensure we do better going forward,” Banga wrote.

The watchdog report detailed sexual abuse experienced by at least 23 children at schools operated by Bridge in Kenya and suggested that the IFC turned a blind eye when complaints became known. It said the institution had failed to regularly “monitor or substantively address” sexual abuse despite being informed multiple times between 2013 and 2017 of incidents at Bridge schools. The IFC also failed to address evidence that Bridge relied on unregistered teachers, the report said.

In March 2022, the IFC quietly pulled direct funding to Bridge, though it retains an investment in one funder that supports the company.

As late as last month, Banga appeared to dismiss suggestions that the IFC took steps to cover up the abuse. “I just disagree that there was a legal effort to cover it up,” Banga said at an event sponsored by the Center for Global Development. “If it is proven to be so, I will take all the action that’s necessary.”

Banga has now proposed the appointment of an independent investigator to ensure that the previous investigation was free of interference. “This is a difficult moment for our institution, but it must be a moment of introspection,” he added.

But critics say this does not go far enough. “If there are no staff consequences for misconduct as egregious as this at the bank, you can be sure that it will happen again,” said David Pred, the executive director and co-founder of Inclusive Development International, a human rights group.

In recent weeks, a dispute has broken out among the nations that make up the board of the IFC about how the bank addresses wrongdoings at companies such as Bridge. The watchdog recommended that victims of abuse receive financial compensation. Yet, the “action plan” approved by the board of the IFC proposed payment for counselling and sexual health services.

“The official management action plan does not actually provide any remedy to the Bridge survivors specifically. IFC instead plans to offer funding to child abuse service providers throughout Kenya,” Pred told Foreign Policy.

U.S. lawmakers have urged the bank to adequately compensate victims, but the United Kingdom and France are reportedly against monetary compensation, as it would be expensive and set a precedent.

“I’m concerned that failing to provide direct and meaningful compensation will not only harm the survivors and their families, but it will also harm the reputation of the IFC, which has a critical mission around the world, and that of the United States as its largest shareholder,” U.S. Rep. Maxine Waters, the top Democrat on the House Financial Services Committee, wrote in a letter to Treasury Secretary Janet Yellen.

A statement by the U.S. Treasury published a day after the action plan was signed says that department officials “believe IFC should keep all remedy options on the table while the consultations proceed.”

Bridge, founded by two Americans, operates a chain of low-fee private schools in Kenya, Uganda, Liberia, India, and Nigeria, supported by high profile financiers that include the European Investment Bank and foundations set up by Bill Gates and Mark Zuckerberg. Civil society groups have criticized other high-profile investors for remaining silent on the scandal. As Banga pointed out, “two of the world’s leading foundations are much larger investors” than the IFC.

Bridge had been under scrutiny for years by IFC investor nations. The chairman of the U.K. Parliament’s international development committee wrote in a letter in 2017 stating that after visits to Bridge schools in Nigeria, Uganda, and Kenya, the evidence of the company’s impact on poverty is likely too weak to justify continued investment. The letter added that its inquiry “raises serious questions about Bridge’s relationships with governments, transparency and sustainability.”

There are many successful private international schools across Africa in what is becoming a lucrative market, but Bridge’s low-cost business model increased the likelihood of harm, development experts told Foreign Policy. Bridge is also facing controversy in Liberia over allegations of sexual abuse in a government education program, which it denies.

The IFC’s board now has six months to agree on a final remedy program in relation to Kenya. U.S. lawmakers have called the Bridge case a “litmus test” for how the institution handles harm caused by its projects—one that will have broader implications on funding the World Bank.

Wednesday, March 27: The U.N. Security Council discusses the U.N. stabilization initiative in the Democratic Republic of the Congo.

South Africa’s central bank determines its interest rate.

Wednesday, March 27 to Thursday, March 28: The U.N. Economic Commission for Africa and the African Peer Review Mechanism hold a retreat in Lusaka, Zambia, on the establishment of the African Credit Rating Agency.

Senegal’s historic election. Bassirou Diomaye Faye, 44, is set to become Africa’s youngest democratically-elected president. Although official results are yet to be announced, outgoing President Macky Sall and his handpicked presidential candidate, Prime Minister Amadou Ba have congratulated Faye on his win. The result means that he will not need to compete in a run-off against Ba as analysts predicted. Faye was released from prison just 10 days before the election.

Foreign and local election observers said that the vote was fair and transparent. A peaceful transition of power in Senegal—after two months of chaos and fears of democratic rollback—marks a boost for democracy in West Africa and within a continent where young people have rarely been able to deliver such a seismic political change.

Faye’s win seems to have spooked investors, however. Senegal’s dollar bonds were among the worst performers following Faye’s win, but markets bounced back after Ba conceded defeat. Some of Faye’s campaign promises are radical—including a review of the Euro-pegged CFA franc and an effort to renegotiate mining and energy contracts just as Senegal is due to become a gas and oil exporter to Europe later this year. Having never held public office, it will take time for Faye to convince investors that he can keep Senegal’s economy on a steady path in the long term.

Nigeria’s kidnappings. All children taken from a school in the state of Kaduna more than two weeks ago have been rescued, according to Nigerian government officials. The rescue came days before a ransom deadline to pay 1 billion naira ($680,000) to the kidnappers. School authorities had originally told the state that a total of 287 students were kidnapped but the Nigerian military said only 137 children were kidnapped and that it had rescued them.

“All of them have come back home safely,” Kaduna state Gov. Uba Sani told Nigerian broadcaster Channels Television. There are often discrepancies in school abduction numbers due to poor record-keeping.

Execs detained in Nigeria. Nigeria has filed charges of tax evasion and complicity in aiding customers to evade taxes against cryptocurrency firm Binance and two of its executives. The two Binance executives—Nadeem Anjarwalla, a dual British-Kenyan citizen and lawyer now based in Kenya, and Tigran Gambaryan, a U.S. citizen and former crypto-focused U.S. federal agent—had been detained since Feb. 26. Anjarwalla escaped on Friday after guards led him to a mosque for prayer, reported the Nigerian newspaper Premium Times. Nigerian officials confirmed the escape on Monday.

South Africa corruption probe. South Africa’s speaker of the National Assembly, Nosiviwe Mapisa-Nqakula, is taking “special leave” after her house was raided last week in a corruption investigation. South African prosecutors said on Monday that they intended to charge Mapisa-Nqakula with corruption, alleging she took $135,000 in bribes over a three-year period while she was the defense minister. She denied any wrongdoing, and the Pretoria High Court is set to deliver a ruling on April 2 on her petition to block the state from arresting her.

It’s a scandal that President Cyril Ramaphosa and the ruling African National Congress can ill afford, dogged by graft allegations during an election year in which the party is predicted to lose its absolute majority in parliament.

The United Arab Emirates is looking to acquire Zambia’s Lubambe Copper Mine, which Chinese firm JCHX Mining had already agreed to purchase. The sale requires approval from the Zambian government, which has yet to finalize any signoff. The UAE has increasingly pitted itself against China in its bid to control the African minerals, ports, and energy market. Last week, the UAE purchased a 51 percent stake in Zambia’s Mopani Copper Mines for $1.1 billion.

Ghana’s international bondholders have begun talks with the government on restructuring more than $13 billion of foreign bonds amid a $3 billion International Monetary Fund bailout and a crucial election year for the country. Globally, Ghana pays one of the highest interests on debt as a percentage of its GDP. It aims to cut $10.5 billion from its external debt repayments and interest costs.

Why China and Russia gain in Egypt. In Foreign Policy, Shady ElGhazaly Harb writes that the erosion of civil society groups in Egypt, coupled with unwavering U.S. support for Israel, have only helped China and Russia gain influence. “Moscow is already cashing in on these gains by hosting Palestinian factions, including Hamas, for reconciliation talks. China sees in the conflict an opportunity to expand its geopolitical role in the region,” ElGhazaly Harb writes.

Libya’s Qaddafi-era cinema. Muhannad Lamin’s debut film Donga documents 10 years of Libya’s complicated political history following the 2011 Libyan revolution. In New Lines Magazine, the Libyan filmmaker argues that The Message and The Lion of the Desert—two films financed by Muammar al-Qaddafi—have had a profound impact on Libyan identity.