Explain KES 61 Billion loan, CORD tells Uhuru
03 November 2015, 19:03
Nairobi - The CORD coalition has asked President Uhuru Kenyatta to explain a KES 61 Billion loan taken up by the government, saying that the debt is unnecessary and has no planning to it.
The Syndicated loan will be taken up by the government in a deal reached between Citi Bank, Standard Chartered Bank and Standard Bank.
Below is the full statement from CORD.
" The National Government has just announced that it has signed a KES 61 billion syndicated loan to fund infrastructure projects. We are aware that this loan was signed on October 28, 2015.
The announcement today has largely come because the government knew we have come to know about this new loan that has many questions begging for answers. We have been aware that this loan is the sole reason President Uhuru Kenyatta, three days ago, was upbeat that the economy is in good shape and the Opposition and Kenyans are simply whining. In reality, we are staring at a classic case of digging a hole to fill a hole.
This new loan, like the Euro Bond loan, has many lose ends and many aspects that need to be explained. For instance, we are aware that certain percentages of this 600 million Sterling Pounds loan, ranging between 1.5 per cent, 1.2 per cent and 1 per cent have been earmarked as commission for those who negotiated this loan and other players in the saga. Information we have is that in total, up to one quarter of this loan will go into commissions for the negotiators and brokers who remain mysterious but whose allocations are clearly spelt out in the loan agreement.
It also remains unclear why Kenya chose to go for loans with the Citi Bank and Standard Chartered Bank of the UK as opposed to other lenders like the African Development Bank whose terms are traditionally more favourable than those of the commercial banks.
This loan comes in the middle of many unanswered questions on Euro Bond. We therefore now demand that President Uhuru Kenyatta immediately reveals to Kenyans all details regarding this loan. This demand does not take away our demands for clarity and probity on Eurobond.
The government must reveal to Kenyans: 1. The terms of contract of the 600 million Sterling Pounds loan just announced. The fact of the matter is that as things stand today; our economy is not in the best shape. Ideally if the markets fear there is a chance of default, they will demand higher interest rates to give return for greater risk. The impact of this will be a reduction of private sector spending thus a constricted economy. That creates a merry go round in which we try to solve a problem only to create another. We need clarity on the terms and conditions attached to this loan if only to assure Kenyans that we are not at the mercy of global finance shylocks keen to capitalize on our shaky situation.
2. The names of all the private institutions outside the Ministry of Finance and Attorney General's office and individuals that were contracted to work on this new loan scheme. They must be mentioned by name, contact address and their roles. These individuals and institutions are clearly allocated commissions out of this loan. We are entitled to know who they are and what they did for us.
3. An account of the processes and projects on which the loan is expected to finance and the current status of the projects. We wish to make it abundantly clear that we do not in any way believe that as a country, we can develop without loans. But we stand opposed to what appears to be a reckless disregard of the interests of future generations of Kenyans, where the Government signs for loans shrouded in secrecy and lack of clarity, and the benefits of borrowing are consumed by the Jubilee government in the form of corruptly acquired wealth for a handful of powerful individuals while the burden to repay is placed on the children and grandchildren of millions of poor Kenyans. We are entitled to answers.
The government is obliged to give us those answers.
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