The State House Anti-Corruption Unit, working jointly with the Inspectorate of Government (IG), has launched investigations into an alleged UGX 1.5 billion corruption scandal involving USMID Additional Financing (USMID-AF) projects in Arua City. The investigations stem from a directive issued by the Head of the State House Anti-Corruption Unit, Brigadier General David Isoke, ordering Arua City authorities to halt payment of UGX 1.5 billion to China Railway Seventh Group Company Limited pending completion of the inquiry.
In a June 24, 2026 letter, addressed to the City Clerk, Brig. Gen. Isoke said the State House Anti-Corruption Unit had received information on June 12 indicating that the Arua City Executive Committee had recommended payment of the money to the contractor as an outstanding balance under the USMID-AF project. According to the letter, the recommended payment was inconsistent with a report by the Contracts Manager, which indicated that the contractor was not owed the claimed amount.
The Unit said investigations were opened to safeguard public funds. The directive followed an extraordinary sitting of the Arua City Council, during which councillors approved payment of UGX 1,596,590,518 to China Railway Seventh Group Company Limited for contractual obligations allegedly arising from works undertaken about two years ago.
The payment relates to claims by China Railway Seventh Group, which implemented World Bank-funded road, street and drainage projects in Arua City beginning in 2022. The company maintains that it was left with an outstanding balance of more than UGX 1.2 billion by the former Arua Municipal Council, an obligation that the city administration inherited. A team of more than six investigators from the State House Anti-Corruption Unit and the Inspectorate of Government reportedly arrived in Arua City last week and is expected to conclude its investigations this week.
Among the officials expected to be questioned are former City Engineer and USMID-AF Project Manager Engineer Anthony Dradria; City Community Development Officer and USMID-AF Project Coordinator Judith Drate; City Clerk David Kyasanku; former Mayor Sam Nyakua; and the current Mayor of Arua City, Lawrence Alionzi. Lawrence Alionzi confirmed that investigators are conducting inquiries in the city but urged the public to allow them to complete their work.
According to a statement by Inspectorate of Government spokesperson Munira Ali, the matter was reported to the Ombudsman, whose office has also taken up the case and is conducting further investigations. The presence of the investigators has reportedly created a subdued mood within the Arua City administration, with some junior staff expressing concern about the implications for ongoing and future projects.
One of the alleged whistleblowers, who requested anonymity, welcomed the investigations, saying they would help prevent the misuse of public funds under the USMID-AF programme. “This should serve as a lesson to the new leadership to do the right thing and not embezzle funds meant for service delivery to the people,” the source said.
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