WYCLIFFE MUGA: We're finally scrutinising loans

Finances
Finances

Up to a few years ago, a newspaper columnist who dared argue that what Kenya owed to various lenders was verging on the unsustainable could only expect yawns of indifference.

Few readers would go beyond the first few paragraphs of his column.

And, indeed, most Kenyans rejoiced whenever there was a photo of some distinguished foreigner “inking” yet another loan to Kenya at the Ministry of Finance’s Treasury building office suites. The general assumption was that “we” were being given “money for development” and this was invariably seen as a good thing.

But in recent years we have seen the term “Eurobond” reduced to a four-letter word. The suggestion firmly planted in many minds by opposition leaders is that there were large sums borrowed overseas (through the infamous Eurobond) which somehow never quite made it into our national budget, but were stolen way out there somewhere.

Making this even more believable is that such financial shenanigans have a long history in African kleptocracies. Most spectacular was the late “Field Marshall” Mobutu Sese Seko, who ruled what is now the Democratic Republic Congo (back then known as Zaire) with an iron fist, and had reportedly mastered the art of diverting foreign loans and grants directly to his personal bank accounts in offshore financial centres.

Thereafter he could at his leisure decide what this money was to be spent on, with no reference at all to the needs of the ordinary citizens of that country: Should he buy one more mansion in some fashionable location in Europe? Or maybe a new personalised jet or two? Or perhaps some improved and more deadly weaponry for his army, to be used against the residents of a troublesome corner of his country, which had foolishly incurred his wrath?

It is with thoughts like those that the Field Marshall reportedly occupied his time.

I referred to African kleptocracies deliberately, because the ongoing revelations of just how much money has been stolen by individuals charged with managing key national institutions suggest that this is what Kenya has been ruled by all along: “A government with corrupt leaders who use their power to exploit the people and natural resources of their own territory in order to extend their personal wealth and political powers. Typically, this system involves embezzlement of funds at the expense of the wider population.”

We Kenyans are no strangers to technocrats of impeccable credentials who upon being appointed to lead one of the key national institutions, begin to loot the place before the ink is dry on their appointment letters. But even the most cynical among us have had cause to gasp this year, as we find out more and more details of such brazen theft in the ongoing anti-corruption purge.

One of the few consolations we can draw from all this depressing news is that it has forced ordinary Kenyans to take an interest in public policy – an interest that there had been no sign of previously.

I personally believe that as this trend matures, it will no longer be possible for the Treasury mandarins to get away with just inviting the media to take photos at some ceremony celebrating the signing of some new loan agreement.

We may yet get to the point where the Treasury will be obliged to not only give detailed specifics of what this money is to be used for, but also a timeline for the implementation of the projects listed.

I am not saying here that the Ministry of Finance has been concealing such details from the public. Just that they do not exactly go out of their way to explain why this new loan is necessary.

Also I must emphasise that even the rich nations in this world will from time to time borrow money for one purpose or another.

So we should not hasten to assume that the mere fact that the Cabinet Secretary for Finance, Henry Rotich, is putting his signature on some new loan agreement means that he is — as some Kenyans are now accustomed to saying — “enslaving future generations who will be required to repay this loan”.

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