A whistleblower has made damning allegations against the East African Development Bank (EADB), accusing the regional lender of entrenched corruption, conflicts of interest, and systemic governance failures in an explosive petition to the regional assembly the East Africa Legislative Assembly(EALA).
In a hard-hitting presentation to EALA’s Committee on Friday presided over over by Kenneth Musyoka,Peter Odhiambo of the Justice Alliance accused EADB officials and board members of running the institution like a “mafia-style cartel” that serves private interests rather than East African citizens.
“This bank, whose vision was to foster development in our region, has become captive to a few people and will remain so unless EALA rises to the occasion,” Odhiambo warned.
He cited what he called blatant conflicts of interest involving senior officials. He singled out former Director General Vivienne Yeda, accusing her of orchestrating questionable transactions while simultaneously serving as chair of the Kenya Power and Lighting Company (KPLC).
“At KPLC, she was involved in a convoluted mix where KPLC would pay money to Lake Turkana Wind Power Company, which had also received a loan from EADB. More than KSh18.5 million ended up in a German account, some of which was flagged by the German government as money laundering,” Odhiambo told the lawmakers.
He further accused the bank of abusing claims of diplomatic immunity to shield itself from scrutiny. “In recent criminal cases, EADB has tried to invoke a non-existent diplomatic immunity. Kenya’s Ministry of Foreign Affairs has confirmed to the courts that immunity extended to the EADB is not absolute and cannot apply under the Vienna Conventions,” he said.
The allegations triggered an outcry from EALA members, who disclosed that attempts had been made to silence them previously .
Tanzanian legislator Dr. Abdullahi Makawe said he faced direct threats, including the issuance of an arrest warrant, after raising questions on a petition involving the bank.
“I went to the media space when the petition concerning EADB was raised but it is factual information and it’s a public matter. Subsequently, I was given a notice that I’m given an arrest warrant. An arrest warrant for talking to the media on issues of EAC? I’m a member of Parliament. I was just simply inquiring about a petition that was presented before the House, and I just gave the information which I had. And that is the extent which the people who are behind this wanted to even intimidate me as a member of the House,” Makawe remarked.
He said he was deeply angered by what he viewed as a deliberate effort to silence elected leaders. “So, I was very offended, because it was not proper. And you cannot issue an arrest warrant, an international arrest warrant, actually. I was just talking about interests of East Africa merely. I didn’t even say who was wrong or who was right. I just spoke of the facts that were presented by the petition. So, Mr. Chairperson, I just wanted to share this information, so that it may be known that there was that action taken to intimidate a member of the Assembly,” he added.
Gai Deng from the Republic of South Sudan Members of EALA,expressed shock at the claims stating that they will get to the bottom of the allegations.
“We are very shocked by this petition the details that you have presented are so vast and i think it will require for us to do justice she said.
Odhiamb.o also decried what he described as “scandalous legal fees” paid out by the bank even as it failed to declare dividends to its shareholders — the citizens of East Africa. “From 2016 to 2024, the bank paid a total of USD 4.4 million to lawyers, yet there was zero dividend paid to bank shareholders in the same years,” he said. “Apart from board members who are paid USD 3,000 per sitting, there are lawyers who are also on the gravy train.”
He warned that the bank’s very existence in Kenya is now under threat following a Machakos High Court ruling that declared the EADB Act of 2014 unconstitutional. “This Act gave the Finance CS of Kenya the license to draw money from the consolidated funds and give it to EADB without parliamentary approval and without being audited by the Auditor General,” Odhiambo explained. “What stops the CS from giving the EADB taxpayers’ money, then using the Board who is also conflicted to borrow the money by proxy, and have the loans written off?”
Odhiambo further pointed a finger at rating agencies and legal advisors, questioning the credibility of the bank’s financial standing. “The representative of Moodies rating Agency for EADB is represented in East Africa by Kotecha of Stanbic, who therefore continuously gives EADB high ratings of BB+, which is not backed by any fundamentals,” he said.
At the heart of the scandal, Odhiambo argued, is a broken governance system that leaves the bank vulnerable to manipulation. He noted that frequent changes in finance ministers across the region have created an environment where “shrewd executive officers” outlast political overseers.
“Take the case of Kenya,” Odhiambo said. “Between 2019 and 2024, there have been four different Cabinet Secretaries for Finance. The ministers get off the train without even fully understanding how the organization works.”
Board members, he added, have entrenched themselves in office far beyond legal limits. “Some private sector board members have been in office for the last 18 years when ordinarily they should serve two terms of three years each. They probably currently own the bank because some of them have borrowed money from the bank, and then met as a board to write off those loans.”
The Justice Alliance petition has now urged EALA to exercise its oversight mandate to rein in the institution. Odhiambo specifically called for investigations into “exorbitant legal fees and the law firms feeding on them” and a review of the entrenched tenure of board and advisory members, some of whom have served for more than four decades.
“This kind of embarrassment of an East African Institution is precipitated by lack of oversight by EALA, Central Banks of the member states, the Council, the Board, and East African citizens,” Odhiambo told the lawmakers.
“Our prayer is that the Assembly pronounces itself expeditiously for the sake of the taxpayers of East Africa, who are ultimately the owners of the bank.”
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