A Kenyan court fight over irregular borrowing is testing the wisdom of a 1927 doctrine on odious debt.

By Probe International

A Kenyan senator is asking the country’s High Court to treat years of irregular borrowing as a tab politicians should pay—not the public.

Busia senator Okiya Omtatah and eight co-petitioners say much of the borrowing under former president Uhuru Kenyatta and current president William Ruto—including a US$7.1 billion Eurobond—is “odious,” reports Kenya’s The Eastleigh Voice. That is, borrowing undertaken without proper parliamentary approval or a clear public benefit, and therefore not a bill ordinary Kenyans should have to repay.

If the court agrees, those debts could be declared unconstitutional or unenforceable against the state, with officials (and, in the petitioners’ telling, complicit lenders) left holding the risk. That is also the odious-debt argument economist Patricia Adams laid out for the Financial Post.

A three-judge bench has allowed a full hearing on years of borrowing under Kenyatta and Ruto, she notes. Omtatah and petitioners have invoked the doctrine of odious debt (formalized by Russian legal scholar Alexander Nahum Sack nearly 100 years ago), to argue less than 30 percent of funding cleared Parliament, much of it never appeared in appropriation laws or real projects, and monies sat offshore. Even the Central Bank has sided with them.

Creditors who skipped those checks, may find the “sovereign” they financed was acting outside the law.

Adams describes the case as a “game-changer,” and one analysts predict might become “the first African judicial precedent on the enforceability of the odious debt doctrine,” and a “a critical inflection point in the evolution of Kenya’s jurisprudence on constitutional law.”

The Eastleigh Voice piece takes that warning home and adds in: personal liability for the political class, and constitutional lawyer Willis Otieno’s point that ordinary taxpayers are servicing debt that never built hospitals or schools. Although markets may flinch at repudiation talk, Otieno’s reply adds Kenyan heat: accountability strengthens credibility rather than undermining it.

“A nation cannot build prosperity while trapped in a cycle of illegitimate financial obligations,” he argues. The debt acquired without transparency, public participation, or demonstrable benefit should not automatically bind future generations. Kenya must draw a legal and moral line between legitimate development financing and borrowing that enriched a few at the expense of the many.”