Jimmy Wanjigi Says Kenya's External Debts Are Odious: "What Projects Did They Fund?"

• Odious or illegal debts are loans taken without the consent of the sovereign people of Kenya or which were not used to benefit Kenyans
• Jimmy Wanjigi said William Ruto's government is paying illegal debts that were not consented to by the sovereign people Kenyan people through parliament
• Wanjigi questioned the government's reluctance to audit the debt to separate the legal and illegal debts

Elijah Ntongai, a journalist at TUKO.co.ke, has more than three years of financial, business, and technology research expertise, providing insights into Kenyan and global economic trends.

A renowned Kenyan businessman and former presidential aspirant, Jimmy Wanjigi, has called upon the Kenya Kwanza government to cease servicing odious or illegal debts.

Speaking on Spice FM Morning Show, Wanjigi said that the acquisition of loans not passed by parliament breached legal institutions and did not fund any development projects in Kenya.

"You can only borrow for development, in the short term, you are allowed to borrow from the overdrafts and bills, which are one year," noted Wanjigi.

He added that some of the government's loans have not been used to fund any project and were not budgeted for development, which places them under odious debts.

"These bonds, for example, that the banks have given to the government, what projects did they fund? What projects did the Eurobond fund?" Wanjigi remarked.

What are odious debts?

According to the International Monetary Fund (IMF), the legal principle of odious debt presents a similar assertion, contending that sovereign debt taken without the people's consent and lacking tangible benefits for the populace is deemed odious.

According to this doctrine, such debt should not be transferable to a succeeding government, mainly when creditors are already aware of these circumstances beforehand.

Wanjigi questioned the reluctance of President William Ruto's government to conduct a loan audit that would reveal odious debts placing a burden on Kenyans.

Kenya should not pay external loans, including Eurobond

Wanjigi noted that the government had failed to buy back part of the Eurobond that Ruto had earlier promised because the institutions that were expected to finance the buyback wanted liability management or debt distress, which the government could not provide.

"Every country that has reached this stage, where you have almost all your revenue going to pay debt has had to default, but Kenya is so special, somehow we are going to avoid it, right?" Wanjigi noted sarcastically.

Wanjigi noted that one of the major triggers in the domestic bonds market was in November when the Standard Chartered Bank decided to liquidate 52% of their government bonds even when it meant a loss of about KSh 2 billion.

Kenya can survive without external debt

Wanjigi reiterated that Kenya is a powerful country, has no problem generating revenue, and can survive without debt.

"We have been made debt-dependent by people who are making money out of the debt situation," he said.

Kenya pays Eurobond interest coupon on time

In other related news, Kenya made a timely interest payment on its Eurobonds.

The interest payment for the $2 billion debt, issued nearly a decade ago at a rate of 6.875%, was due by December 24.

This successful interest payment set Kenya apart from its neighbour, Ethiopia, which recently defaulted on Eurobond payments.