A whistleblower has raised serious allegations against the East African Development Bank (EADB), accusing the regional lender of corruption, conflicts of interest, and weak governance in a petition to the East African Legislative Assembly (EALA).
In a detailed presentation to EALA’s Committee on Friday chaired by Kenneth Musyoka, Peter Odhiambo of the Justice Alliance accused EADB officials and board members of operating the institution like a “mafia-style cartel” that serves private interests instead of citizens of East Africa.
“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 pointed to conflicts of interest involving senior officials and cited former Director General Vivienne Yeda, accusing her of overseeing questionable deals while also serving as chair of the Kenya Power and Lighting Company (KPLC).
“At KPLC, she was involved in a scheme where KPLC would pay money to Lake Turkana Wind Power Company, which had also received a loan from EADB. Over KSh18.5 million ended up in a German account, some of which was flagged by the German government as money laundering,” Odhiambo told legislators.
He also claimed the bank has been abusing claims of diplomatic immunity to avoid accountability.
“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 claims sparked reactions from EALA members, who revealed they had faced threats for raising concerns.
Tanzanian MP Dr. Abdullahi Makawe said he was even issued with an arrest warrant after questioning a petition involving the bank.
“I went to the media when the petition concerning EADB was raised because it was factual information and a public matter. Later, I was issued with an arrest warrant. For what? For simply speaking on an issue of the EAC as a member of Parliament? It was intimidation,” Makawe said.He added that it was wrong for attempts to be made to silence elected leaders.
“You cannot issue an international arrest warrant just because a legislator speaks on East Africa’s interests. I did not even point fingers; I only spoke of the facts in the petition,” he said.
South Sudan’s Gai Deng said the Assembly would get to the bottom of the matter.
“We are shocked by this petition. The details are vast, and we must do justice,” he remarked.
Odhiambo also condemned what he termed “scandalous legal fees” spent by the bank while no dividends were paid to shareholders.
“From 2016 to 2024, the bank paid USD 4.4 million to lawyers but not a single dividend to its shareholders,” he said, adding that board members pocket USD 3,000 per sitting.
He warned that EADB’s existence in Kenya faces risk after a Machakos High Court declared the EADB Act of 2014 unconstitutional.
“This Act allowed the Finance CS to allocate money from the consolidated funds to EADB without parliamentary approval or audit. That money could then be misused with the help of conflicted board members,” he said.
Odhiambo further questioned rating agencies and advisors, accusing them of propping up the bank’s image.
“Moody’s East Africa representative is Kotecha of Stanbic, who continuously gives EADB high ratings not backed by fundamentals,” he noted.
He said poor governance was at the center of the crisis, with frequent changes of finance ministers in the region leaving “shrewd executives” in control.
“Between 2019 and 2024, Kenya alone has had four different finance ministers, none of whom stayed long enough to understand the bank fully,” Odhiambo stated.
He also claimed some private board members have overstayed illegally, with some serving for 18 years instead of two three-year terms, even writing off loans they themselves borrowed.
The Justice Alliance petition is now calling on EALA to use its oversight role to investigate questionable legal fees and review the long tenures of board and advisory members, some serving for more than 40 years.
“This embarrassment to an East African institution is due to lack of oversight by EALA, Central Banks, the Council, the Board, and citizens,” Odhiambo concluded.
“Our prayer is that the Assembly acts quickly for the sake of taxpayers of East Africa, who are the true owners of the bank.”
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