Why writing in support of International Debt Cancellation is Important
Thursday, June 26th, 2008The following article contributed by Jubilee USA gives a clear description of why International Debt is so unjust and also such an obstacle to overcoming extreme poverty. We have urged you to write in support of debt forgiveness in the past. The following example by a Kenyan college professor shows why we must keep up the pressure for debt forgiveness.
By Dominic Odipo Op-Ed in The Standard
There are many strange and ridiculous stories that have sprouted out of Kenya’s unholy experience with its public or national debt. One of the most ridiculous of these goes all the way back to 1953 at the height of the Mau Mau rebellion for Kenya’s independence.
During that year, the colonial government borrowed, on behalf of the Kenyan people, more than Sh500 million [Blog the Debt Note: 1 Dollar = 61 Kenyan Shillings, so a little more than $8 million] to be repaid by us, with interest, in future. The money was borrowed to enable the colonial government to buy specialised military aircraft from Europe with which it would bomb the Aberdare Forest and kill or maim Mau Mau freedom fighters who were believed to be hiding there.
At Independence in December 1963, the Kenyatta-led government inherited all the loans that had been contracted by the colonial government, including this one. And so, over the years, we have been paying off — through our noses — a loan that was contracted to acquire the military capability to kill our own people!
Strange debt
There are many other strange stories about Kenya’s national debt which have unfolded over the years. If you could scrutinise the Public Debt Register at the Treasury, you would probably find that, in the mid-1980s, the government borrowed more than Sh100 million for the construction of a giant meat processing plant called Halal, which was to be built near Ngong’ Town.
The site of this giant plant is about two kilometres from the Shade Hotel on the Karen-Ngong’ road. Visit this site today and you will find that this giant meat processing plant does not exist. Yet we, the Kenyan people, are still paying through our noses every month for this meat processing plant that was never built.
The full story of Kenya and its rather dubious national debt can drive even the coolest and most collected among us up the wall. Every month, as our children die in their thousands all over the country for lack of basic medical drugs, the government is forking out Sh12 billion [Blog the Debt Note: $193.7 million] to service our so-called national debt.
For every shilling that we invest in the education sector (development expenditure), five shillings are set aside to pay off our national debt. For every shilling that we invest or spend in the health sector, seven shillings are spent to service debt. If we turn these figures around, perhaps the message gets clearer.
If we were to stop paying off Sh12 billion each month to service this debt, we would have five times as much money as we now have to invest in the education of our children.
All education in this country, from primary school to university, would be absolutely free and we would still have billions left over.
If we were to stop servicing this debt, we would have seven times as much money to spend in the health sector overnight. This means that we would be able to build a modern hospital in every constituency, fully equipped and staffed, in only three years. In other words, every shilling we pay to service this dubious national debt translates directly into the death or disability of our people. The people are being slowly hanged on the cross of this ‘national debt’.
Usury
But this debt nightmare gets even more frustrating and infuriating as one delves further into it. According to reasonably reliable estimates from the Treasury, since independence in 1963, the government has borrowed almost Sh1 trillion (Sh1,000 billion).
Over the same period, we have managed to pay off approximately Sh3.5 trillion or about three and a half times what we are supposed to have borrowed. Yet the end is still nowhere in sight.
According to the same estimates, our outstanding national debt today is just over Sh750 billion, a figure that is rising by the month due to cumulative interest charges. And then, believe it or not, we are still borrowing for, among other things, the construction of ghost factories and laboratories. We have realised that we are already deep inside this dubious debt hole, but we are still digging.
There are very few political problems facing this country that are more serious that this debt crisis. This problem seeps into every facet of our national life. Continued servicing of this dubious debt is a matter of life and death. We need to thoroughly interrogate this debt and quickly decide whether we are going to remain enslaved by this dubious debt or whether we are going to find an alternative way forward.










