New constitution must ease public debt burden

By OKIYA OMTATAH OKOITI
Published January 3, 2009

An issue that is of utmost importance but one that has received scant or no attention from media commentaries on the Harmonised Draft Constitution is that of our astronomically high public debts, which to service annually gobble up an average of 25 percent of the national budget.

Over the decades, runaway public debts have impoverished our country. The high cost of servicing them has taken critically scarce money away from development projects and vital services such as our struggling healthcare and education sectors. This has depressed our economic growth and jeopardized poverty reduction programs, leading to the current instability associated with primitive competition for scarce and diminishing resources.

Clearly, if the new order is to be democratic it must also ensure mass prosperity because democracy cannot coexist with poverty. It must root out obvious and avoidable causes of our underdevelopment and its attendant mass poverty, including corruption, the general waste of resources, and the slavery of debt.

To avoid the slavery of debt, there is need for a robust regulatory framework for public borrowing and public debt management. Mechanisms to protect the country from runaway public debt must be enshrined in the Constitution and in other laws that accord several institutions of Government different mandates in the acquisition, management and utilization of borrowed funds.

Whereas, there is no express demand in Article 103 of the current Constitution (which deals with public borrowing) that the government of the day should be accountable to Kenyans for the debts it incurs, refreshingly, Articles 253(2) and 255(4) of the Harmonised Draft Constitution expressly detail proposed limits to government borrowing. Clearly, in the proposed new order, all future public debts will have to be approved by Parliament.

But that alone is inadequate. The new order must free us from the burden of repaying existing odious debts, which some estimates put at more than 60 percent of our total debt burden. Because the current Constitution allows the government to borrow secretively and liberally without involving Parliament and, by extension, the people, a lot of the debts we have paid and are still paying today were regime debts corruptly contracted through Anglo-leasing type deals taken out, not to benefit the people of Kenya, but individual powerbrokers or the regime of the day.

The regime debts go back to the colonial era and include the money the colonial government borrowed to fight the Mau Mau and terrorise ordinary Kenyans. For example, it is outrageous that Kenyans have been repaying and continue to repay the debts that were incurred so that citizens in the Mt Kenya region could be terrorised and killed. Instead of providing the people of Nyeri with social amenities such as piped water, the post-independence governments have been using some of our very limited taxes to repay debts that were incurred so that, day and night, from 1952 to 1956, British troops and the Royal Air Force’s Lincoln aircraft could respectively terrorise villages in Nyeri and bomb Mau Mau forest hideouts.

Kenyans have repaid and continue to heavily repay odious debts incurred by the colonial, Kenyatta, Moi and Kibaki administrations. This must come to an end in the new order. Debts that were contracted by a regime to benefit itself or its powerbrokers, and not the people, are regime debts to be paid back by the regime owners. They are not sovereign debts that belong to the public and which Kenyans have to repay. Those debts belong to the colonial, Kenyatta, Moi and Kibaki administrations respectively and their powerbrokers who benefited from them.

Important as it is, the draft new Constitution must go beyond just demanding that in the new order Parliament will have to approve government borrowing. The draft should ensure that none of the regime debts of old find their way into the new order. In its transitional provisions, the draft should demand that all regime debts should be separated from sovereign debts so that the people of Kenya only pay back what was legitimately borrowed to benefit them.

The current public debt register that stands at more than one trillion shillings needs to be published and forensically audited as part of the transition mechanism to the democratic dispensation. We must know who and what we really owe. We must know how the borrowed money was used. We must carry out a forensic audit of the public debt register to isolate genuine sovereign debts which we will proceed to repay, from odious ones which we will repudiate under international instruments governing such debts, so that rogue lenders and borrowers can settle their regime debts away from us.

Under the same mechanisms we must also be able to recover from individual beneficiaries and regime powerbrokers all the public money that has to date been used to settle these odious debts.

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