Thursday, 24 May 2007 14:26

Religious organizations to scrutinize utilization of donor money

Written by Arthur Okwemba
A technical committee to scrutinize the Kenya Debt register and report to the public how the previous and current regimes have used donor money will be in place soon.

Already, a number of reputed organizations – Oxfam and Institute of Economic Affairs, among others- have been identified to be members of the committee that will provide technical expertise in scrutinizing the debt register.

“The register has a lot of technical data and information which require experts to scrutinize it to determine how funds were used,” says Mr Magnus Bruening, Research, Advocacy and Information Technology manager at Kenya Episcopal Conference, Catholic Secretariat.

If this is successful, Kenyans will for the first time know how much was funded for projects in their areas, and whether or not they benefited. 

A local organization is also being tasked to come-up with monitoring mechanisms that will track agreements the government is entering into, the funds signed for, and their intended use. The results of the monitoring are to be relayed to the public on a regular basis. 

Arrangements are further being made to meet, Germany - the current President of the Council of European Union and the Group of 8 rich countries - on the debt issue. 

“We are lobbying foreign ambassadors in Kenya on the need to start negotiations with the Kenya government on the debt cancellation,” says Bruening. 

The debt campaigners are also moving to enlist the support of Kenya Anti-Corruption Commission to help in investigating and prosecuting corrupt individuals who the debt register may indicate were beneficiaries of the money loaned to the country. 

These actions by the debt campaigners are some of the boldest moves made in recent times to pinpoint what funds came into the country and who benefited. 

{styleboxjp echo=on}A debt register details the amount of money the government has received, from whom, and for what purposes.  Areas to benefit from these funds are also listed, making it easier for the public to track if ever the money ended up being used for that purpose.{/styleboxjp}

International NGOs in other parts of the world have successfully scrutinized the debt register of the countries they operate in to determine how the money was used.

For along time, the Kenyan debt register has remained a guarded secret despite it being a public document.

Only recently, the Catholic Economic Justice Network, an inter- religious debt cancellation campaigners managed to use their tact, determination, and connections to access the debt register. 

But the information they got from the Ministry of Finance goes up to 2002, touching only on donor money received during former President Moi’s regime.

In fact, intense behind the scenes moves are being made to have the government give an updated debt register that shows how much has been received since the Narc government came to power in 2003. 

Last Thursday, the campaigners handed over 85,000 post-cards signed by Kenyans calling on the government to refuse paying the debts and the donors to cancel what they say they are owed. 

The Chair of Kenya National Human Rights Commission, Maina Kiai, who received the cards at a ceremony held at Uhuru Park’s Freedom Corner, is expected to hand them to Amos Kimunya, Minister for Finance, in whose docket the register lies, and the Speaker of the National Assembly. 

Maina is also expected to help put pressure on the current government to provide an updated debt register. 

Launched in 2006 under the slogan “Debt is Slavery! Debt is Poverty! Refusing to pay is Justice!” the post-cards are a petition to the developed countries to cancel illegitimate debts and to press the Kenyan government to refuse to pay such debts. 

The move comes hot on the heels of claims that much of the loans advanced by developed countries did not benefit Kenyans, but individuals. 

So far, in the Debt register of upto 2002 that the campaigners have in their possession, four projects have been identified as those whose funds went into individual pockets. 

The money was mainly earmarked for road construction and upgrading especially in the North Eastern Province. 

In many other projects, donor funds are captured in the register as having been used for certain purposes, which are non- existent on the ground. 

“We are already establishing glaring discrepancies between what is on paper and what is on the ground in various parts of the country,” Njuki Githethwa of Kenya Debt Relief Network said while addressing delegates at the World Social Forum at Kasarani, a month ago. 

Money that did not benefit Kenyans is what the campaigners call illegitimate debts. Such debts are loans taken by countries but did not benefit the public, but ended up lining pockets of individuals. 

Or the money was used by a government to finance repressive activities targeting its own people, especially dictatorship regimes struggling to hold on power by using the funds to torture and frustrate those agitating for popular democracy. 

Nigeria is a case in point where debt relief plea was granted after the government of Olusegun Obasanjo argued that much of the loans it received were used by corrupt military dictators, who were known by foreign banks and governments

The CEJ Network that compromises SUPKEM, Anglican Church, Hindu Council of Kenya, and the Kenya Debt Relief Network, have for the last three years been campaigning for unconditional debt cancellation for Kenya.

From March last year, the group has made numerous trips around the country informing Kenyans about the impact of the debt burden on social, educational, health, and economic aspects of their life. And how this money can benefit them at the household level, if the debt is cancelled. 

By November last year, the country had a debt totaling to Sh 806 billion – Sh 425 billions as external debt and Sh 381 billion as domestic debt. 

A significant fraction of this money is suspected to be illegitimate debt, with some debt campaigners estimating it to be as high as 80 percent. 

In the Financial year 2005/2006, the government put aside Sh 122 billion as budgetary allocation to service the debt; amount higher than what was allocated to education (Sh 96 billion) or health (Sh 30 billion).

While in the 2006/2007 budget, 19 percent or Ksh 107 billion of the budget was set aside to finance debt obligations. 

This trend is expected to continue for many years to come as long the current debt stands and the government continues to enter into new debt arrangements with donors. 

Past efforts to relieve Kenyans from the pain of paying debt have either been unsuccessful or painfully slow. The Kenyan government has on one hand said it cannot repudiate the debts as this will challenge it credit worthiness. 

On the other, institutions like International Monetary Fund have been uneasy with debt cancellation concept that has no clear programme on how they will make-up for the money owed to them. 

In 2005, when the Group of 8 industrialized countries, World Bank and International Monetary Fund announced 18 countries to benefit from a debt cancellation package, Kenya was not among them. 

Uganda, Ghana, Mozambigue, Niger, and Nigeria are some of the African countries benefiting from the package.

A decision to leave out Kenya catalyzed the inter-religious network to start campaigns and come up with strategies to ensure this happens for country where more than half of the population subsists on less than a dollar a day. 

In the ongoing campaign, they want five key things to be done to ensure Kenya’s past and present loans from donors or taxes are accounted for as well as applying pressure on developed countries to cancel those debts classified as illegitimate. 

Opening the Public Debt Register for scrutiny and publishing its contents; and ensuring those who siphoned public money are made to return it, apologize to the public, and then punished for their ills, are some of the things the campaigners want done. 

Others are: reducing the domestic debt stock; providing annual comprehensive financial report of public income and expenditure; and creating monitoring mechanisms that ensure future loans are approved by Kenyan people and then used in a transparent manner. 

Enabling the public and the civil society access the Debt Register is to help in the identification of illegitimate debts and people responsible.  This is to be used as evidence to the donors why certain debts have to be cancelled. 

However, one of the problems at the moment is for the donors and the government to agree that certain donor funds were used inappropriately, a prerequisite for debt cancellation to take place. 

Only Norway has so far cancelled debt totaling US$ 80 million owed by five countries - Egypt, Ecuador, Peru, Jamaica and Sierra Leone - after accepting shared responsibility for failed development policies that saw the citizens of these countries lose out. 

The deals involved the exportation of Norwegian ships to these countries between 1976 and 1980.  Other creditor rich countries have refused to follow Norway example. 

“We are appealing to developed countries unwilling to cancel debts to start negotiation on an alternative model of debt conversion,” says Bruening. 

Under debt conversion agreement, an understanding is reached whereby instead of Kenya paying the money to the owed country; it is converted and channeled to Fund that will finance development programmes. 

A committee made of representatives from the two governments – Kenya and the donor country- decides on what are the priority projects to invest the money in. Much of this money is put in social programmes that target the poor like HIV/AIDS treatment. 

One such agreement exists between the Kenyan and Italian government, with the latter agreeing to convert the debt into financing development programmes within the country such as slum upgrading. 

Under this arrangement, the money the government is supposed to pay Italy as debt repayment is put in a Fund. 

The government is however not making these arrangements public for people to participate in how the funds are utilized. 

Meanwhile, donors are receiving heavy criticisms for not monitoring how their loans are used, but instead continuing to fund regimes even when the money is not benefiting the public. 

The World Bank and International Monetary Fund (IMF) have been asked to set up a commission with mandate to find out how their funds have been utilized in the past.

Sign up

AWC maintains a constant flow of well-researched feature stories and publications

Read → Feature articles | Commentary Service | Newspapers | Reports | Books


Fill in your email address to get highlights from our publications

Publications

  • 1