The East African Development Bank (EADB) is in the eye of a storm after a whistleblower filed explosive claims of corruption, shady financial dealings, and cartel-style governance at the regional lender — revelations that have now sparked fears of a cover-up, with lawmakers alleging intimidation and threats.
In a petition to the East African Legislative Assembly (EALA), activist Peter Odhiambo of the Justice Alliance accused senior EADB officials and board members of running the bank like a “mafia cartel” serving private interests instead of East Africans.
“This bank, whose vision was to foster regional development, has been captured by a few people. Unless EALA acts, it will remain a playground for profiteers,” Odhiambo warned during a tense session chaired by EALA’s Kenneth Musyoka.
Explosive Allegations
Odhiambo singled out former Director General Vivienne Yeda, accusing her of overseeing murky transactions while also serving as board chair at the Kenya Power and Lighting Company (KPLC).
“At KPLC, she was involved in a convoluted mix where KPLC paid money to Lake Turkana Wind Power Company, which had also received an EADB loan. Over KSh18.5 million ended up in a German account, part of which was flagged for money laundering,” he told the committee.
He further accused the bank of hiding behind “false diplomatic immunity” to dodge scrutiny. Kenya’s Ministry of Foreign Affairs, he noted, had already confirmed to courts that such immunity is not absolute under the Vienna Conventions.
MPs Cry Intimidation
The shocking revelations provoked anger among legislators, some of whom claimed they had already faced threats for questioning EADB’s operations.
Tanzanian MP Dr. Abdullahi Makawe revealed that he was issued with an international arrest warrant simply for discussing an EADB-related petition in the media.
“I was only relaying facts already before this House. Yet I was intimidated and told I could be arrested. This is unacceptable. It’s an attempt to silence members of Parliament,” he said.
South Sudan’s Gai Deng expressed outrage, pledging that the Assembly would dig deeper. “We are shocked by these details. We must do justice and hold those responsible accountable,” she said.
Billions Lost, No Dividends
The petition also accused the bank of “scandalous legal fees” and financial mismanagement. Odhiambo claimed that between 2016 and 2024, the bank spent USD 4.4 million on legal fees — yet failed to pay a single dividend to its shareholders, the citizens of East Africa.
Meanwhile, board members allegedly pocket USD 3,000 per sitting, with some private-sector directors clinging to office for up to 18 years, far beyond their legal terms. “They probably own the bank now. Some even borrow money from EADB, then meet as a board to write off the loans,” Odhiambo alleged.
A Bank on Shaky Ground
Adding to the chaos, a Machakos High Court recently declared the EADB Act of 2014 unconstitutional, ruling that Kenya’s Finance CS could not hand taxpayers’ money to the bank without parliamentary approval or auditing.
“This creates fertile ground for looting,” Odhiambo warned. “What stops a CS from channeling billions to the bank, then letting conflicted board members borrow and write it off?”
He also questioned the credibility of the bank’s credit ratings, saying Moody’s East Africa representative — linked to Stanbic’s Kotecha — had consistently issued unjustified BB+ ratings “not backed by fundamentals.”
Call for Action
Odhiambo called for urgent oversight, demanding investigations into bloated legal contracts, entrenched board members, and what he called a “culture of impunity” at the heart of EADB.
“This scandal is a shame to East Africa. EALA, central banks, the Council, and citizens must act. The taxpayers are the real owners of this bank, and they deserve answers,” he said.
The petition now piles pressure on EALA to take decisive action against an institution once envisioned as a vehicle for regional growth but now accused of being hijacked by vested interests.
