World Bank denies possibility of withdrawing AIDS funding

The World Bank has denied that it threatened to withdraw funding for HIV/AIDS projects in Kenya because of allegations of corruption within the National AIDS Control Council (NACC).

"I was disappointed to see the totally false assertion that the Bank had threatened to cut off its assistance to fight HIV/AIDS due to concerns about corruption," said World Bank Country Director Makhtar Diop.

In a statement, Diop said the Bank welcomed an internal investigation, currently being undertaken by the Office of the President, into allegations of corruption within the NACC. "We welcome this, as a sign that the government is taking seriously the general issue of the proper use of funds."

He said the Bank was confident that the government would take whatever actions may be necessary following the review.

Since 2001, the Bank had been financing two HIV/AIDS operations in Kenya - one through the Ministry of Health and the other through the NACC - each worth US $50 million, a spokesman for the Bank, Peter Warutere, told IRIN. To date US $15 million has been handed over to the NACC.

NACC has denied the allegations of corruption.

Speaking generally about corruption in Kenya, Diop added that the "signs are very good that Kenya is turning the corner on fighting corruption". He said this had led to a "marked strengthening" of relations between the Bank and the government.

Among the positive steps taken by the government, he said, were the enactment of the governance and ethics laws and the cabinet's approval of legislation aimed at increasing accountability and transparency in the management of public finances.

The international watchdog, Transparency International, ranked Kenya 96 out of 102 countries on its 2002 Corruption Perceptions Index, stating that corruption was perceived to be "rampant".