Africa

Why Kenya missed out on debt relief

Kenya Debt Relief Network (KENDREN)
News from Africa
June 27, 2005

We write to share our concern at the “shock” by members of the public, the media and some government officials at Kenya having been “denied debt relief,” and to shed further light on the nature of the debt cancellation campaign here in Kenya.

First, the debt relief recently offered to 18 countries, which included our neighbours Uganda, Tanzania and Rwanda, came within the framework of the Highly Indebted Poor Countries (HIPC) initiative. The HIPC initiative is a World Bank/IMF arrangement extended to impoverished countries with unsustainable debt levels. These countries had reached “Completion Point” status within the HIPC arrangement, meaning that their governments had satisfied many of the conditionalities demanded by the World Bank/IMF in order to qualify for debt relief. Kenya is not under the HIPC initiative. It is taken as a middle-income country able to service its debts.

Second, the deal fell short of the civil society debt campaigners’ demand for 100% unconditional cancellation of All African and developing countries’ external debt. This demand would have ensured that all poor countries get debt relief, including Kenya and Nigeria, not currently covered under HIPC.

Third, the Government of Kenya has not vigorously sought for debt relief. As regards debt cancellation at the bilateral level (country to country) it is unclear what steps our government has taken as these proceedings, for the most part, have not been made public.

It would seem some government officials feel that keeping up-to-date on debt servicing is enough to warrant relief, thus suggesting that debt cancellation is a gift bestowed on those who faithfully make interest payments in time as opposed to a demonstrated commitment to debt management and monitoring mechanisms, better governance, elimination of graft and pro-poor policies and schemes.

To date, the government of Kenya has failed to open the Public Debt Register to the scrutiny of Kenyans. The Public Debt Register contains the records of all loans contracted by the government on behalf of the people of Kenya. Failure to make its records public denies debt campaigners the moral energy to effectively campaign for the cancellation of the debts presumed to be illegitimate and odious.

Similarly, there are no public debt management and monitoring mechanisms in place in Kenya. The effects of this are twofold. First, it means that there are no open mechanisms through which the process of contracting loans/negotiating loans is put to scrutiny by the Kenyan people. Second, there is no system to monitor the inflow of funds (be they through loans, grants or debt relief), which would guarantee that these monies are used for development purposes meant to improve the quality of life of the poor.

In view of the foregoing, we ask the following:

1. That the government of Kenya make public the steps it has taken to make a unified and official request for debt cancellation and to justify the burden it continues to put on its citizenry by servicing these debts. Why should the poor, who have no say in the accruement of the debts and have received little or no benefit from them continue to bear the greater burden of debt repayment.

2. That the people of Kenya join us in our campaign to put pressure on the government to fight corruption, to put in place the required debt management and monitoring mechanisms and to firmly demand for debt relief as proof of its commitment to alleviate poverty.

Issued by the Kenya Debt Relief Network (KENDREN) and the Catholic Economic Justice – Africa.

Categories: Africa, Kenya, Odious Debts

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