RIGHT, hands up if you can think of a bunch of words and figures being bandied about in the media lately that have left you totally bewildered. Give yourself full marks if any of the following came to mind: Eurobond, Sovereign Bond, Syndicated Loan, Consolidated Fund, Offshore Account, GoK/CBK Sovereign Bond Account, Tap Sales, PFM Act, Transaction Advisers, Pre- Negotiated Expenses ……….. blah, blah, blah.
Add yourself a gold star if you admit to feeling similarly dazed by the accompanying numbers, some in dollars, some in shillings, all mixed up: US$2bn, Kshs.15bn, US$1,998,997,763, Kshs. 25bn, US$604,560,737, Kshs.30bn, US$395,439,262, Kshs.17,268,281,135, US$999,052,872, Kshs.34,648,388,180.25, US$999,002,853, Kshs.3,394,492,135.47, US$815,436,932 ………….. Confused? Darn right.
You and me both. And do you know what? We are meant to be confused. As George Orwell, author of the political novella Animal Farm, said, “Insincerity is the great enemy of clear language. When there is a gap between one’s real and one’s declared aims, one turns instinctively to long words and exhausted idioms.” Or in this case, one turns to complicated banking terms and tortuous lists of perplexing numbers.
This cynical piece of pseudo-science being propagated by the National Treasury is as clear as mud, as it is intended to be. It is meant solely to make us so disoriented that we stop questioning something that in truth has not one ounce of credibility.
It is meant to make us believe that a certain nearly one billion US dollars belonging to Kenya has actually been received in this country and put to good use. That is categorically untrue – so let’s just try to unravel all that deliberate confusion a bit, and attempt to get a little closer to the actual picture.
Former CBK Governor Njunguna Ndungu
Let’s start at the beginning
It all goes back to 2010 and 2011, when the Kenya government, with Uhuru Kenyatta running the Treasury (ministry of finance, from where all Kenya’s money is controlled) decided the country was short of cash and needed to borrow a substantial sum. Kenyatta and co made an approach to several international banks and these banks in turn joined up together to deal with the request (in other words, they formed a ‘syndicate’, which simply means ‘a group of businesses’). Standard Bank was the leader of the syndicate and all the banks involved asked their wealthier clients to put up some of the money Kenya needed.
When this money, amounting to US$600 million, was gathered together, it was called “the Syndicated Loan”. Kenya would have to repay it in August 2014. I don’t know what that money was spent on but it might be worth noting that this all happened in the run-up to the last elections. Just saying.
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