The East African Development Bank (EADB) has come under intense scrutiny after a whistleblower accused the regional lender of corruption, conflicts of interest, and governance failures in a petition presented before the East African Legislative Assembly (EALA). The explosive revelations have not only cast doubt on the integrity of the bank but also triggered claims of threats and intimidation directed at legislators probing the matter.
Whistleblower Raises Alarm on “Cartel-Like” Operations
Peter Odhiambo of the Justice Alliance submitted a damning petition to EALA’s Committee on Friday, chaired by Kenneth Musyoka. He accused EADB’s top officials and board members of running the bank like a “mafia-style cartel” that serves private interests at the expense of 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 told lawmakers.
Questionable Transactions and Conflicts of Interest
Among the most serious claims was a conflict of interest involving former Director General Vivienne Yeda, who allegedly presided over questionable transactions while serving simultaneously as chair of Kenya Power and Lighting Company (KPLC).
Odhiambo alleged that KPLC paid money to Lake Turkana Wind Power Company — a firm also funded by EADB — with over KSh18.5 million eventually being flagged by German authorities as possible money laundering.
He also accused the bank of misusing diplomatic immunity to evade scrutiny. “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,” Odhiambo said.
Lawmakers Claim Intimidation and Threats
The allegations prompted an emotional response from MPs, some of whom revealed that they had been targeted for raising questions about the bank.
Tanzanian MP Dr. Abdullahi Makawe claimed he was issued with an international arrest warrant after speaking publicly about an earlier petition on EADB.
“I was just simply inquiring about a petition that was presented before the House. Subsequently, I was given a notice of an arrest warrant — just for doing my job as a legislator,” he lamented.
South Sudanese MP Gai Deng expressed shock at the whistleblower’s revelations, promising that EALA would “get to the bottom of the allegations.”
Millions Paid in Legal Fees, No Dividends for Shareholders
Odhiambo also highlighted what he described as “scandalous legal fees,” noting that between 2016 and 2024 the bank paid USD 4.4 million to lawyers but declared zero dividends to shareholders — the citizens of East Africa.
Meanwhile, board members are alleged to have pocketed USD 3,000 per sitting, while some private sector directors have overstayed their terms by up to 18 years.
“These individuals have entrenched themselves in office, borrowing money from the bank and later sitting as a board to write off their own loans,” Odhiambo alleged.
Governance and Oversight Gaps
The petition painted a picture of a deeply compromised governance structure. Frequent turnover of finance ministers in member states, Odhiambo argued, has created a vacuum that shrewd executive officers exploit.
“In Kenya alone, there have been four different Cabinet Secretaries for Finance between 2019 and 2024. Ministers barely understand how the institution works before being moved, leaving entrenched executives to run the show,” he said.
The whistleblower also questioned the credibility of credit ratings, claiming Moody’s East Africa representative has close ties to Stanbic, which in turn continues to award EADB favorable ratings not supported by fundamentals.
Legal Challenges Threaten EADB’s Existence in Kenya
Adding to the institution’s woes, a Machakos High Court ruling recently declared the EADB Act of 2014 unconstitutional. The law allowed Kenya’s Finance Cabinet Secretary to channel funds from the Consolidated Fund to EADB without parliamentary approval or auditing by the Auditor General.
“This ruling raises fundamental questions about the bank’s operations in Kenya and whether taxpayer funds were exposed to abuse,” Odhiambo warned.
Call for Urgent Oversight and Reforms
The Justice Alliance petition called on EALA to urgently exercise its oversight mandate to safeguard East African taxpayers. Recommendations include:
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Investigations into exorbitant legal fees and the law firms involved.
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A review of board and advisory members’ terms, with limits enforced.
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Probes into conflicts of interest and insider dealings.
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Stronger oversight mechanisms by EALA, national central banks, and finance ministries.
“This kind of embarrassment of an East African institution is precipitated by lack of oversight,” Odhiambo concluded. “The Assembly must pronounce itself for the sake of the taxpayers of East Africa.”
What Next?
The allegations against EADB have raised the stakes for EALA, which now faces mounting public pressure to act decisively. Whether the assembly will impose reforms or the matter will fade into yet another unresolved scandal remains to be seen.
For millions of East Africans who depend on regional institutions to drive development, the credibility of the bank — and of EALA itself — hangs in the balance.