Africa

Secrecy on loans queried

Geoffrey Irungu
The Nation (Nairobi)
July 6, 2005

The government has been accused of keeping the record of its foreign loans secret. The state is also being accused of dragging its feet in the push for debt relief only making its voice heard at the last minute.

NGOs say that there is no system to monitor and manage debts in the country.

“The Government of Kenya has not vigorously sought for debt relief. As regards debt cancellation at the bilateral level it is unclear what steps our government has taken as these proceedings, for the most part, have not been made public,” says Kenya Debt Relief Network (Kendren) and Catholic Economic Justice-Africa.

They want better governance, elimination of graft and pro-poor policies to strengthen Kenya’s case for debt relief.

Meanwhile, the Minister for Planning and National Development, Prof. Anyang’ Nyong’o said in a statement, e-mailed from New York, that Kenya would be unable to meet Millennium Development Goals unless the debts were cancelled.

The minister, who is attending a UN Economic and Social Council meeting said that even if the annual economic growth was in the range of seven to 10 per cent, it would generate only $19 billion, which was far below the $61 billion needed to meet MDGs by 2015.

First, the debt relief recently offered to 18 countries, which included Uganda, Tanzania and Rwanda, came within the framework of the Highly Indebted Poor Countries (HIPC) initiative, a World Bank and International Monetary Fund (IMF) arrangement extended to impoverished countries with unmanageable debt levels.

The 18 countries had reached “Completion Point” status within the HIPC arrangement, meaning that their governments had satisfied many of the conditions demanded by the World Bank and the IMF in order to qualify for debt relief. Kenya is not under the HIPC initiative as it is taken to be a middle-income country able to pay its debts.

The debt cancellations, Kendren says, fell short of the campaigners’ demand for 100 per cent unconditional abandonment 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,” says Kendren.

It adds that, the government has failed to open the Public Debt Register to the scrutiny of Kenyans yet it contains the records of all loans contracted by the government on behalf of citizens.

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, said Kendren.

Prof. Nyong’o noted that Kenya would be able to develop fast “if we are not burdened by the US$1.25 billion (Sh95bn) debt servicing per annum to which we are currently subjected.” Security, human rights and development are key pre-conditions for meeting the MDGs, said UN boss Kofi Annan.

The UN meeting opened last week.

Categories: Africa, Kenya, Odious Debts

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