By Mumbi Mutoko
A petitioner, Professor Fred Ogola, under the banner of Operation Linda Ugatuzi, has petitioned to halt government borrowing until a comprehensive audit of the country’s debt is conducted. The petition hinges on a series of weighty constitutional concerns that warrant meticulous consideration by the court. As the High Court deliberates on the petition, let’s step back and consider its merits.
Prof Ogola’s petition, seen by the Nairobi Law Monthly, argues that the government’s borrowing practices fly against constitutional integrity. Central to the petition’s foundation are amendments to section 50 (97) of the Public Finance Management Act no.18 of 2012, sanctioned by the National Assembly in 2014. These amendments, the petition contends, erected a gateway for unauthorized government borrowing, dismantling the constitutional safeguard of parliamentary approval enshrined in both law and the constitution.
A key pillar of the petition vests on eliminating the constitutional mandate for foreign aid and borrowing funds to be funneled into the consolidated fund or the specific public funds designated by the Constitution. This convolution in fund allocation, Prof Ogolla says, has paved the way for a shadowy landscape devoid of transparent oversight. The result is a mounting heap of debts, some veiled in the opacity of questionable practices within the National Treasury.
In his supporting affidavit, Prof Ogola says that the country’s outstanding debt catapulted to a staggering Sh2.37 trillion during the 2014/15 financial year. The subsequent expansion of this figure has propelled the petitioners to sound the alarm on the legal legitimacy of this swelling debt – under a web of dubious public obligations facilitated by unscrupulous practices within the National Treasury.
The petitioner decries the lack of proper legislative authorization for certain debts. This precarious disconnect raises questions about the authenticity of these debts concerning bona fide development projects during the critical juncture of 2014/2015. The ongoing debt accumulation without the requisite legislative green light is posited as a stark violation of constitutional obligations and established legal parameters.
The petition doesn’t merely seek a courtroom victory; it calls for restoring fiscal honor and transparency. By demanding an audit of the national debt and urging the publication of precise and current debt data on official platforms, the petition strives to recalibrate the nation’s financial compass and reestablish robust fiscal oversight mechanisms that breathe life into constitutional norms.
One of several petitions filed
Prof Ogolla’s petition echoes Busia Senator Okiya Omtatah’s claim that Kenya has not only fully repaid its debts but exceeded obligations by a staggering Sh1 trillion in a bold challenge to the foundation of the nation’s financial narrative. While seemingly audacious, these claims beckon a spotlight for scrutiny, particularly in the context of Ogola’s petition that seeks to unravel the complexities of Kenya’s public debt.
And, in July, two petitioners, lawyers Shadrack Muyesu and Klinsmann Munase (http://localhost/nairobilaw/bid-to-halt-appropriations-act-2023-before-the-high-court/), want government spending stopped due to government’s failure to declare the country’s total debt obligation, making it difficult to ascertain the debt stock and authorise payments. The two lawyers also want the court to issue orders barring the National Treasury from financing any debt taken by the country, block expenditures not declared in the Appropriation Act as well as suspend some sections of the Public Finance Management Act, 2012.
“The petition doesn’t merely seek a courtroom victory; it calls for restoring fiscal honor and transparency and reestablishing robust fiscal oversight mechanisms that breathe life into constitutional norms”
The conjunction of these voices provides an opportune moment to delve into why these allegations warrant a serious and meticulous examination. Omtatah’s claim of Kenya’s debt clearance is audacious, defying the conventional wisdom surrounding the country’s financial reality. However, beneath the surface lies a nuanced concern that underscores an apparent paradox. Omtatah asserts that while government records denote consistent payments to creditors, the debt portfolio remains stagnant, devoid of updates spanning years.
What compels serious attention is Omtatah’s assertion that the funds disbursed from the exchequer have ostensibly not been dedicated to debt repayment as intended. Instead, these allegations suggest a sinister diversion of these funds into the pockets of a privileged few.
“Kenya has overpaid its debt by more than Sh1 trillion; we do not owe anybody anything,” Omtatah said, raising a clamor of questions that pierce the surface of fiscal discourse. This refrain not only unveils an excess in debt repayment but also casts a shadow on the management and allocation of borrowed funds.
Omtatah’s narrative rests in the purported amendment of the Public Finance Management Act during the tenure of President Uhuru Kenyatta. This alteration, Omtatah contends, facilitated the channeling of funds into offshore accounts, serving as conduits for misappropriation. He underscores the constitutional obligation that borrowed funds must reach the consolidated fund, subject to parliamentary approval and oversight by the Controller of Budget.
Omtatah’s spotlight on the Standard Gauge Railway (SGR) project adds a surreal layer to his claims. His contention that construction funds were transacted in China, while reflected as debt in Kenya, portrays a disjointed fiscal tale. The assertion that not a single coin was received in Kenya prompts an examination of the entire modus operandi of debt management, unveiling questionable practices.
Furthermore, Omtatah’s gaze falls upon the Office of the Auditor General, whose alleged oversight lapses allow for discrepancies between declared and actual disbursements. He alleges this permits a shadowy dance between funds intended for development and their clandestine deviation.
Amidst the clamor for answers, Omtatah’s proposal to hold high-ranking individuals from prior regimes accountable aligns with the broader clarion call for transparency. This appeal for external audits resonates against Kenya’s projected public debt, slated to surge to Ksh.9.4 trillion by June, overshooting the Treasury’s 55 percent of GDP target.
As Omtatah’s claims intermingle with Fred Ogola’s petition seeking accountability in Kenya’s public debt arena, the echoes of financial scrutiny grow louder. The court’s decision on both cases could reshape Kenya’s fiscal landscape, prompting a recalibration of financial stewardship and an imperative reevaluation of accountability mechanisms.
In their petition, Muyesu and Munase argue that paying off debts whose status were yet to be made public would be a violation of the law. The two argue that their case is based on the fact that most of the funds borrowed by the government in the last ten years, like the Eurobond, were yet to be accounted for.
Some of the borrowed funds, the petitioners argue, are also said to have been diverted to accounts not authorized by law, including offshore accounts, making it difficult to ascertain the true extent of the country’s total debt stock.
They argue that in the case of the Eurobond which was borrowed by former President Uhuru Kenyatta for instance, most of the proceeds either ended up in offshore accounts or were diverted to other accounts.
As the court prepares to deliberate on these petitions, it shoulders the weight of a decision that transcends the courtroom walls. The decision rendered will not only shape the contours of financial management but will reverberate as a testament to the nation’s commitment to constitutional governance and fiscal integrity.
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