The Nation (Nairobi)
March 3, 2005
The Economist article “No Longer Unforgivable” didn’t cross my desk unnoticed. It made me sit up. “Ridiculous though it sounds,” the piece contended, “Nigeria merits some debt relief.” Oil rich Nigeria? Yes, that’s right.
For years, policymakers and activists alike have acknowledged that the world’s poorest countries are incapable of financing their debts (to other countries, private lenders and multilateral lending institutions such as the World Bank and IMF) without continuing to rot in poverty. And it’s quite simple why when you think of it – such external debt typically amounts to multiples of the country’s gross domestic product (GDP) and is impossible to service without consuming already meagre foreign exchange and government revenue – funds that would otherwise support the economic, social and environmental recovery they were intended to but which, as Kenya has illustrated, don’t.
Just look at us! Rather than trust accounts, our children inherit debt. Instead of being children, they are saddled with adulthood, fetching firewood instead of doing homework and heading households when they should be schooling. Our adults wear pride and bravery as many struggle on less than a dollar a day – something unaffected by the desire to work or worse yet, tireless toil. We spend millions – multiples of healthcare costs servicing debts while our sick languish at home with bare cupboards, dirty drinking water and no medicine. And yet, we are the norm – an example of others slowly dying under debt incurred by governments, largely squandered by officials and then paid for by the masses – the same individuals not consulted or allowed to benefit from such undertakings.
But are kleptocracy and economic incompetence sufficient reasons for debt relief? Many, including Steve Forbes, say no – such forgiveness, they fear, might create a “moral hazard” – a trend whereby governments excessively borrow and misuse loans in expectation of forgiveness. A probability. But not enough to overshadow sound arguments in favour of debt relief – reasons which Kenya has and must advance.
For one, Kenya, too, can uphold the argument that her debt should be waived because it’s odious; debt accrued under a dictatorship. Should it not matter that it was incurred under a leadership notorious for corruption and embezzlement – something our lenders were fully aware of when they extended us such credit? There are as many fingers as there is blame to go around on this one, further stressing that our ongoing debt problems are not of our making alone and that somewhere along the line, these loans have more enhanced than alleviated poverty. Did you know that we are on the only continent to have grown poorer in the past 25 years? While in 1970 Africa housed 10 per cent of the world’s poor, it was home to about half the world’s poor in 2000. Of what good have the loans been?
Blair’s initiative can be applauded not only for being courageous but also for advocating debt relief by tying it to our poverty. How I wish America could see that and understand the relationship between poverty and terrorism – the global instability they have set out to trample on and continue to spend an estimated $500 billion a year on while they give about $16 billion to poverty-related issues worldwide. Did our US embassy bombing and 9/11 not clearly illustrate that “a hungry man is an angry man” and the oppressed are not always weak?
Out of contractual obligation, Kenya is labouring under debt faithfully serviced. And it is crippling! The country needs a real helping hand – empowerment to enable its ongoing reforms (e.g. constitutional and sectoral) and corruption eradication. We are deserving of relief and if anyone has a case, we do! We should be noted for our continued importance in regional peacekeeping (as illustrated by our interventions in Sudan and Somalia); commitment to democracy (we have a multiparty system and uphold liberal press) and, last but not least, our value in the fight against global terrorism.
Our leaders must argue for and pursue an economic jumpstart that will free us to revive a large pool of stalled or nonperforming educational, infrastructural and health portfolios, among others. It is painful to imagine the number of hospitals or universities we could have built and equipped or road networks we could have constructed with the Sh8.4 billion we paid in foreign interest in 2002-2003 or how much more we could accomplish with the Sh7.7 billion payment servicing 2004-2005’s external debt of about Sh388 billion.
Let us – in remembering that it is in the West’s best interest for Kenya to be politically stable with a steady, vibrant economy – aggressively campaign for relief. The wealthy cannot afford the cost – moral, human and economic – of an entire continent’s poverty.
Categories: Africa, Kenya, Odious Debts
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