Jubilee 2000 calls end to secrecy over Kenyan Loans

 

At a conference in Nairobi, Jubilee 2000 Coalition director, Ann Pettifor, called for the governments of Britain and Kenya to “come clean” over how £39 million of British taxpayers' money loaned to Kenya has been spent. She gave backing to the Kenyan Jubilee 2000 campaign, which was launched in August 1998 to highlight the injustice of ordinary people paying for debts they had no knowledge about.

Ms Pettifor was addressing a Euro-African conference on Friday, 4^th December, organised in conjunction with the Green Forum of Sweden, the Heinrich Boll Foundation of Germany and the Kenyan green belt movement.

Ms Pettifor said: “The British and the Kenyan governments must come clean. British taxpayers have guaranteed £39 million of loans to the Kenyan government. We know that these credits were given to promote and guarantee British exports – but officials will not give further details. We are particularly concerned that the loans may have been used to finance British arms exports to the Kenyan government.

“The burden of repayment of these debts now falls on the Kenyan people, especially the poorest. This is because the Kenyan government's scarce revenues are being diverted away from health and education, and into unproductive debt service to the British government. Last year, Kenya handed £8 million to the British Treasury. That money would have been much better spent on health, education and clean water.”

The Kenyan government currently spends $840 million a year on paying debts. This is more than the Kenyan Government spends on health and education combined. Kenya currently has a total debt of $6.9 billion – 61% of the debt has been built up since Daniel Arap Moi became President. Kenya is currently being considered for the HIPC debt initiative, however the resources released by the initiative will only release $230 million. Jubilee 2000 Coalition estimates that if Kenya is to meet the OECD targets of halving poverty by the year 2015, a further $700 million will be needed to put into health, education, sanitation and other development spending.

The Kenyan Jubilee 2000 Campaign was launched in the slums of Nairobi to emphasise the link between the debt and its burden on impoverished people. Wangari Maathai, Coordinator of the Kenyan Jubilee 2000 campaign said: “Ignorance is what has led Africans to suffer since they do not know when this money is borrowed or what it is used for until the debts have been accumulated and they are called upon to repay them.” She called for good governance and suggested the formation of a Parliamentary Committee to co-ordinate conditions under which debts would be cancelled and to examine future loans and grants to avoid a repetition of the crisis.

Kenya presently has debts of $65 million (£40 million) to Britain. However British taxpayers, through the Export Credit Guarantee Department in the Department of Trade and Industry, have provided further guarantees on new loans to Kenya – to the value of $122 million. Kenya's total debt is $6.9 billion. Of that 61% or $4.2 billion is debt incurred since Daniel Arap Moi became President. The World Bank (IDA) lent $1.8 bn to Kenya; of that $900 million has been granted since 1990. Kenya's total debt is 226% of exports, and annual debt service is 27% of annual export revenues. Present debt service is $840 million per year, 27% of exports. If Kenya were to enter the World Bank's HIPC (Highly Indebted Poor Country) Initiative and receive debt reduction to 20% of exports, debt service payments would fall to $610 million. The Jubilee 2000 Coalition estimates that if Kenya is to meet the OECD (DAC) targets of halving poverty by the year 2015, at least $700 million per year more would need to be diverted to health, education, water and other development spending, which would lower possible debt service to a sustainable $140 million per annum. $840 million a year leaves the country to pay Western creditors, while Kenya only spends $820 million a year on health and education combined.