The geopolitics of anti-corruption as global advisory firms face debarment in the Horn of Africa

• The World Bank’s debarment of PwC and EY for fraud in Ethiopia and Somalia has lifted the veil on the fragility of the Western development model, creating a strategic opening for Gulf states and China to reshape infrastructure finance in the Horn of Africa.
• PwC units admitted to collusive practices, including bid-rigging and misuse of confidential information, on the $1.3 billion Eastern Electricity Highway Project, while EY Kenya confessed to corrupt practices in Somalia. These scandals shatter the reputational shield that global advisory firms once provided to multilateral lenders.
• A 21-month debarment is a reputational blow but not an existential threat to the Big Four. However, the resulting uncertainty and heightened compliance burdens may push Horn of Africa governments toward alternative financiers.

In international development, reputation is the currency. That is why for the network firms of PricewaterhouseCoopers, brands synonymous with trust, fiscal probity, and the very architecture of global financial standards, a 21-month debarment by the World Bank is more than a regulatory slap on the wrist. It is a widening rift in the facade of the Western-led development model.

On March 18, 2026, the World Bank announced the sanctioning of three PwC units: PwC Associates Africa Ltd (Mauritius), PwC Kenya, and PwC Rwanda, for “collusive and fraudulent practices” tied to the $1.3 billion Eastern Electricity Highway Project connecting Ethiopia and Kenya. This decision follows a pattern of high-profile blacklistings, including the 2024 debarment of Ernst & Young (EY) Kenya for corruption in Somalia, and signals a critical inflection point.

For decades, the “Big Four” audit and advisory firms have served as the indispensable intermediaries for multilateral lenders, acting as the gatekeepers of public funds in some of the world’s most fragile states.

Yet, as these gatekeepers are now found to be picking the locks, a profound geopolitical shift is underway. While Washington-based institutions double down on punitive compliance, rival powers, notably China and the Gulf states, are offering the Horn of Africa a bypass: infrastructure financing without the intrusive governance conditions that have now ensnared the West’s own trusted advisors.

The anatomy of PwC Kenya, Pwc Rwanda fall in the Horn of Africa

To understand the gravity of the PwC sanctions, one must look at the project at the heart of the scandal. The Eastern Electricity Highway Project was a flagship initiative of the Eastern Africa Power Integration Program. Designed to build a 1,045-kilometer high-voltage transmission line from Wolayta in Ethiopia to Suswa in Kenya, it was intended to bolster Kenya’s electricity supply while monetizing Ethiopia’s surplus hydropower. It was a linchpin of regional integration, a poster child for World Bank engineering.

According to the World Bank’s Integrity Vice Presidency (INT), the misconduct was not a case of minor administrative oversight but a systemic manipulation of procurement. In 2019, the three PwC subsidiaries obtained confidential procurement information from project officials to improperly influence the award of a consultancy contract for implementing International Financial Reporting Standards (IFRS) at the Ethiopian Electric Power Corporation.

Simultaneously, the firms attempted to sway the award of a fixed asset inventory and revaluation contract for the Ethiopian Electric Utility. In this instance, the firms misrepresented the availability, qualifications, and employment status of key experts while failing to disclose the full roster of sub-consultants.

Under a settlement agreement, the firms admitted culpability, accepting a reduced 21-month debarment in exchange for cooperation, internal disciplinary actions, and a commitment to overhaul their integrity compliance programs. The World Bank noted that this conduct constituted “collusive and fraudulent practices” under its Consultant Guidelines.

This was not an isolated incident. The pattern of misconduct by top-tier advisory firms in the Horn of Africa is becoming unmistakable.

In July 2024, EY Kenya was handed a 30-month debarment following an investigation into the Somali Core Economic Institutions and Opportunities Program (SCORE) and the Second Public Financial Management Capacity Strengthening Project (PFM II).

The World Bank found that EY Kenya had failed to disclose a conflict of interest during the selection and implementation of four contracts. More alarmingly, during one contract, the firm “made a provision for allowances to be paid to project officials”, a euphemism for bribes, constituting “fraudulent and corrupt practices”.

Similarly, the Africa Development Professional Group (ADP), a Nairobi-based consultancy, was blacklisted for 21 months for omitting to disclose a conflict-of-interest relationship in a separate Somali project.

These cases reveal a troubling operational reality. In the chaotic, high-risk environments of the Horn, Somalia, Ethiopia, and the borderlands, the very firms hired to ensure financial propriety were actively subverting it.

The “Revolving Door” and the Failure of the Gatekeeper Model

The scandal exposes a structural vulnerability in the development finance architecture: the “gatekeeper” model. The World Bank relies almost exclusively on a cartel of Western advisory firms to administer its projects. These firms provide the technical assistance, financial management, and auditing services that the Bank mandates for its loans.

However, this reliance creates perverse incentives. The firms are simultaneously judges and participants. They set the standards for compliance while competing fiercely for the lucrative contracts to implement those standards.

In the case of the Eastern Electricity Highway Project, the firms were caught using confidential information from inside the project, likely obtained through the “revolving door” that sees Bank officials cycle through private sector roles, to rig the bidding process in their favor.

When the World Bank debars a firm, the punishment is significant but narrow. A 21-month ban from World Bank-financed projects is a reputational blow, but for a global network such as PwC or EY, which derives revenue from a vast array of private sector and non-World Bank public sector clients, it is rarely existential. The firms can simply wait out the clock, rebrand their compliance departments, and resume bidding.

Moreover, the Bank’s sanctions are rarely applied retroactively to the individuals responsible. While the firms admit “culpability,” the partners and managers who authorized the misrepresentation of “key experts” or the provision of allowances to government officials often escape with disciplinary actions rather than criminal prosecution.

This dynamic undermines the Bank’s stated goal of “good governance.” By banning the corporate entity but not dismantling the culture that allowed the fraud, the system incentivizes a form of regulatory arbitrage where misconduct is treated as a calculable cost of doing business in high-risk jurisdictions.

The Geopolitical Vacuum: Enter the Alternative Financiers

The most significant consequence of these debarments may not be felt in the boardrooms of London or New York, but in the corridors of power in Addis Ababa, Nairobi, and Mogadishu. For the governments of the Horn of Africa, the spectacle of the World Bank punishing its own trusted advisors for corruption raises a pointed question: If the guardians of the Western financial system cannot be trusted, why abide by their cumbersome rules?

This sentiment creates an opening for alternative financiers who do not tie their capital to the same stringent governance frameworks. Chief among these are the Gulf states and China.

The United Arab Emirates (UAE) has emerged as a dominant force in the Horn’s infrastructure landscape, often bypassing the traditional World Bank procurement route entirely. In January 2025, the UAE confirmed plans to finance a $3 billion, 250-kilometer railway linking the Ethiopian border town of Tog Wajale to the port of Berbera in Somaliland.

This project is designed to reduce Ethiopia’s dependence on Djibouti, which currently handles 90 per cent of its trade. It is a massive, strategic infrastructure play executed through bilateral government-to-government agreements, with minimal reliance on Western advisory intermediaries.

Additionally, Emirati entities such as DP World and AD Ports have been acquiring stakes in ports across the region, from Berbera to Dar es Salaam, with a speed and scale that Western development banks cannot match. For a country like Ethiopia, which is landlocked and hungry for growth, the UAE’s offer of a new port and railway, unencumbered by the integrity compliance conditions that just snared PwC, is profoundly attractive.

Simultaneously, China is deepening its engagement. In early 2026, Chinese Foreign Minister Wang Yi embarked on his annual New Year tour of Africa, making a historic stop in Somalia, the first visit by a Chinese foreign minister since the 1980s.

Beijing is keen to reinforce its influence around the Gulf of Aden, a vital corridor for Chinese trade. In Ethiopia, China is not just building roads; it is pushing for the “Africanisation” of investment, aiming to turn raw materials into finished products on African soil.

The contrast in operating models is stark. The World Bank, after the PwC and EY scandals, is forced to double down on compliance, demanding that firms implement “integrity compliance programs” and adhere to increasingly complex guidelines.

For a Somali or Ethiopian minister, this translates to delays, legal fees, and the risk that their project will be halted because a consultant in Nairobi failed to disclose a sub-contractor.

Conversely, the Chinese model, often characterized by infrastructure-for-resources deals and state-owned enterprise execution, prioritizes speed and certainty.

The recent completion of the 950-kilometer Western Railway Mining Line in Algeria by China Railway Construction Corporation (CRCC) stands as a testament to this efficiency. Built in the harsh conditions of the Sahara, the project utilized Chinese equipment and standards, creating thousands of local jobs without the involvement of a Big Four auditor.

While critics argue this model lacks the transparency safeguards of the World Bank, for a government facing a budget crisis, the allure of a completed project, without the risk of a contractor being debarred halfway through, is undeniable.

World Bank Debarments: Implications for International Advisory Firms

For the international advisory industry, the current climate represents an existential threat to their monopoly on multilateral development work.

Firstly, the cross-debarment mechanism is tightening. The World Bank’s debarment of PwC and EY qualifies for automatic enforcement by other multilateral development banks under the 2010 Agreement for Mutual Enforcement of Debarment Decisions.

This means a firm banned by the World Bank is effectively banned from the African Development Bank, the Asian Development Bank, and the European Bank for Reconstruction and Development. The “cost of misconduct” is no longer just a 21-month hiatus from one lender; it is a potential multi-year exile from the entire ecosystem of Western-backed development finance.

Secondly, there is a looming fragmentation of standards. As the World Bank raises the bar for compliance to avoid future scandals, the cost of doing business with it increases.

Smaller local firms, which the Bank claims it wants to empower, cannot afford the forensic accounting teams and legal departments required to navigate the Bank’s integrity compliance guidelines. The sanctions against EY Kenya and PwC, ironically, may create a vacuum that squeezes out local sub-contractors who relied on these global primes for work, leaving the playing field to a shrinking pool of hyper-compliant, but still Western-dominated, firms.

Thirdly, the firms face a loss of “moral license.” Historically, the Big Four could command premium fees by offering clients, both governments and multilateral banks, a “reputational shield.”

The assumption was that if PwC or EY signed off on a project’s finances, it was clean. The explicit admission of “corrupt practices” by EY Kenya and the “collusive practices” by PwC shatter that illusion. If these firms are found to be arranging bribes for government officials (as in the EY case) or rigging bids (as in the PwC case), their value proposition collapses.

The debarments of PwC and EY are pointers to a deeper transition. The World Bank is caught in a paradox. To maintain its credibility as a steward of donor funds, it must aggressively police its contractors. Yet, by exposing the corruption of its own intermediaries, it undermines the credibility of the governance model it seeks to export.

For the Horn of Africa, a region defined by its strategic chokepoints and resource wealth, this creates a clear fork in the road. The Western path, represented by the World Bank, now comes with higher compliance costs, slower disbursements, and the risk that a trusted advisor might be sanctioned mid-project.

The alternative path, paved by Emirati capital and Chinese state-owned enterprises, offers speed, fewer conditionalities, and a focus on physical infrastructure over institutional reform.

As China’s foreign minister tours the region and UAE cranes unload cargo at Berbera, the question for Horn of Africa governments is no longer just about securing financing. It is about which development model they are willing to accept and whether the Western model, with its rigid rules and its now-tarnished gatekeepers, can remain competitive in a market where the competition is playing by a very different set of rules.

The firms of PwC and EY will likely survive their debarment periods, emerging with new compliance manuals and rebranded ethics training. But their loss of moral authority may prove permanent. In the high-risk, high-reward landscape of the Horn of Africa, the era of the untouchable Western advisor appears to be drawing to a close.

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