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Proposed Solutions by the Dialogue Reference Group on Ballooning Kenyan Debts are False and Flawed
by David Calleb Otieno
25 September 2018

The Kenyan Peasants League (KPL), a member of La Via Campesina and part of the Kenyan Social Movements for the Abolition of Illegitimate Debts has been following closely the just concluded Dialogue Reference Group meeting that brought together a section of religious leaders and Kenyan civil society. KPL finds that their proposals to check the Kenyan debts, already unsustainable, is not only fundamentally flawed but false as the Kenyan debt crisis cannot be solved by using the same capitalist practices and logic that created it in the first place.

On the face of it, the call by the Dialogue Reference Group for an independent audit of the Kenyan debts in order to establish how much is owed to each creditor, the conditions imposed by them, purposes for which the money was borrowed and where the money went to sounds progressive and pro-people. However, their proposal that the Kenyan parliament should commence the so called independent debt audit in six month raises eyebrows.

The same parliament has in the past enacted legislations promoted by the criminal troika of the International Monetary Fund (IMF), World Bank (WB) and the World Trade Organizations (WTO) like the Value Added Tax (VAT) Act 2013 or the recent repeal of the law that vested powers on the Central Bank of Kenya (CBK) to cap interest rates. This repeal was as part of the preconditions for Kenya to access more credit from the market. It is intriguing how can such an institution that has already sold our sovereignty to the undemocratic and unaccountable institutions like the IMF & WB can be entrusted with initiating an independent debt audit as proposed by the Dialogue Reference Group.

Furthermore, the proposals by the Dialogue Reference Group that in case the Kenyan parliament fails to initiate this audit in the next six months it shall by its own establish a people’s national debt audit task force to conduct the independent audit, exposes their real identity. Their purpose is to act as local agents of the International Financial Institutions (IFSs) while posing as pro-people who are already suffering from the dysfunctions of the current capitalist system that is driven by pursuit for profit at the expense of the lives and livelihoods of millions of Kenyans.

While KPL believes that a citizens debt audit is a key to unearth the real identity of the Kenyan creditors, we note that the process should be driven by the citizens and not by Nairobi based elite associations like Dialogue Reference Group as we consider that a true and authentic fight against ballooning Kenyan debts is not and should not be treated as a mere technical and economic issue that needs technocrats alone, but must be driven and controlled by the people themselves who are affected by these unsustainable debts. According to KPL, the Kenyan external and internal debts are a mechanism used to transfer wealth created by Kenyan workers and small scale producers to benefit the capitalists while the local ruling class and their allies like the Dialogue Reference Group skim off their commissions during this transfer in form of funding for activities that do not benefit local citizens.

It is ironical that the meeting convened by the Dialogue Reference Group was attended by envoys of countries that are fighting for a slice of the Kenyan debt as has been witnessed in the recent past. There is an emerging scramble between the US and China. The Dialogue Reference Group’s intention to establish a so called people’s national debt audit task force to address the Kenyan debt crisis while at the same time inviting envoys of countries that want to continue to increase the burden of Kenyan debt further is a sham.

The KPL believes that the Kenyan debt crisis is a result as well as a symptom of the dysfunction of the global financial systems. It can only be truly addressed by changing the current capitalist economic model that gives more authorities to corporate elites. It is ironical that the latter despite having caused the current Kenyan debt crisis want to be part of the solutions of the debt quagmire that we are now in as a country. The proposals by the Dialogue Reference Group would lead to false and flawed solutions since they don’t challenge the powers of the undemocratic institutions like the IMF, WB and WTO. These institutions influence Kenyan financial and economic legislations and policies leading to debt.

The powers to solve the Kenyan debt crisis must be returned to millions of Kenyan peasants that pay taxes and feel the pinch of the increased taxes rather than such undemocratic and unaccountable amorphous bodies like Dialogue Reference Group. The membership of such organizations are largely drawn from a few religious, corporate and civil society elites from above whose proposed solutions to the Kenyan debt crisis are intended to ensure constant economic expansion and protection of the interests of the corporate elite and IFIs regardless of the consequences of such false solutions on the millions of Kenyans.

It is baffling how Kenyan debt crisis can be solved using the same logic and principles being pushed down our throats by IMF, WB and WTO that was created over seventy years ago to alleviate poverty but has instead been pushing neo-liberal policies like free market trade, privatization and deregulation that has evidently made the rich richer, while poverty and world hunger continue to remain at staggeringly high levels.

It is clear that Kenyan debts have been incurred contrary to the provisions of the article 201 of the Constitution of Kenya 2010 which states that there must be openness, accountability and public participation in all financial transactions including incurring of debts and that the burdens and benefits of public borrowing must be shared equitably between present and future generations. Furthermore, they are contrary to the objectives of the Public Finance Management Act stating that all public finances must be managed in accordance with the principles of public finance management as stipulated under article 201 of the Constitution of Kenya 2010.

Thomas Sankara aptly captured the debt colonization by saying that if African countries stopped paying debts, the lenders will not die while if they paid then the African citizens will die. The KPL is calling for repudiation and abolition of all illegal, illegitimate and odious Kenyan external and domestic debts as they were incurred illegally and illegitimately and the burden be passed to those that benefited from such money as opposed to passing the burden on Kenyan workers and peasants.

KPL is also demanding that instead of IFIs imposing skewed conditions on Kenya to access development aid, the IFIs should instead push for recovery of assets embezzled by Kenyan corrupt leaders and kept in banks of the global north with the complicity of IMF, World Bank and WTO.

KPL is also calling on all Kenyans to demand unconditional reparations for the historic, social and ecological injustices committed to Kenyans during the colonial and post-colonial period.

David Calleb Otieno

KPL International Coordinator and Convener, Kenyan Social Movements for Abolition of Illegitimate Debts