Treasury is looking for a syndicated loan to pay off the Sh77.25 billion (another previously syndicated) loan taken in 2015 that’s due next year (2019). The debt the country is hoping to clear with this syndicated loan is one which nobody knows what it was spent on.
Actually, that’s the nature of the syndicated loans. Banking experts will tell you a syndicated loan, among other things doesn’t require the public be informed on the details. That explains why such loans are extraordinarily expensive because; the secrecy and the fact that it is availed quite quickly without any need for disclosure of the projects or whatever it is going to be spent on makes it all the more expensive.
It’s not just the loans that the government is not willing to be accountable to its people on; even the grants they’re getting are shrouded in secrecy. A few days ago, Tinderet MP, Alex Kosgey expressed his frustrations with Treasury after it appeared apparent the government wasn’t going to divulge the deal that saw European Union (EU) give loans and grants amounting to Sh520 billion to Kenya. He lamented that Treasury won’t even say how much was the loan and how much was the grant.
The contempt the government has for the great people of this republic is mindboggling. Firstly, the Office of the Auditor General came under scathing attack following his revelations that the 2014 Eurobond couldn’t be accounted for. And as if that wasn’t enough, the government goes for a syndicated loan that doesn’t require they divulge details.
President Kibaki under the Grand Coalition government managed to bring down the government debt to GDP in 2012 to 38.2% an all-time low but the Jubilee government has managed to reverse this in the 6 years it has been in office, with a 57.1% debt to GDP in 2017. This data is according to the Trading Economics site. Never mind the International Monetary Fund (IMF) recommends that ratios of public debt to GDP should not be higher than 40% for developing countries.
One of the strange phenomena that indirectly leads to this borrowing craze that can’t be accounted for is that whenever the budget is read, MPs hardly interrogate it in light of the previous budget and particularly stalled development projects. The result therefore is a situation where, new projects are started while previously initiated projects have stalled having gobbled up a substantial amount of the budget with no form of accountability.
In fact in July 2018, MPs were divided over the President’s directive to government accounting officers whom he warned against sanctioning new projects without completing those that are ongoing. Majority opposed to the directive complained that their areas would suffer at the expense of previously launched projects in other constituencies. They weren’t concerned about the national debt or whether the monies were being used prudently. They wanted something visible in their constituencies to guarantee their election in 2022.
Worth noting is Treasury, apparently publishes a quarterly report by their Debt Management Office. Few MPs scrutinize it to get proper answers over our seemingly inability to manage public debt. From IMF and recently the World Bank, accusatory fingers are pointing at this critical office within Treasury but nothing has come of it; at least not from our elected leaders.
This nonchalant approach to the dangerously rising public debt is seen in their recent push to have rent-free house, a government vehicle, an expanded medical cover, travel allowances and an expanded constituency outreach operation as reported by the Daily Nation. The Bill that will see all 416 MPs enjoy this new benefits despite already existing perks like car grants, mileage allowance and mortgage facility is based on a recommendation by the Justice and Legal Affairs Committee report.
Not too long ago, when the country was divided and MPs unable to debate effectively on any issue due to the political heat; they miraculously came together to condemn the state of their three-star meals. In a rare show of unity the MPs demanded a complete refurbishment that will see the services rival that of a five-star hotel, complete with masseuse.
Despite the good efforts of MPs like Alex Kosgey, their unanimous push to increase their perks at such a time and despite being one of the best paid legislators in the world negates any good intention and shows them as completely aloof.
Parliament being the true voice of Wanjiku must realize their core duty, whether representation law-making or oversight should have Kenyans at heart. Their desire to live lavishly at the expense of the majority poor is no longer tenable and as a people we must begin exercising the right of recall. In the meantime, Wanjiku must push for their elected leaders to not only put an end to this borrowing craze but also demand evidence of what the money borrowed has been used on and action taken where there’s embezzlement.