Raila Odinga raises red flag on planned second Eurobond

CORD leader Raila Odinga has warned against granting Kenya another Eurobond until it accounts for Sh250 billion issued in 2014.

Raila yesterday said President Uhuru Kenyatta’s administration had proposed a second sovereign bond for listing on the Irish Stock Exchange by last Friday.

He warned that proceeding with the bond issue would leave the country with no option but to declare the debt odious.

An odious debt, also known as illegitimate debt, in international law means a national debt incurred by a regime for purposes that do not serve the best interests of the nation and should not be enforceable.

“We further caution and serve notice that should the above named persons/entities proceed with the issuance of any new International Sovereign Bond (Eurobond) by the Government of the Republic of Kenya without satisfactory resolution of the unresolved matters raised in respect of the 2014 Eurobond, then the named persons/entities risk declaration of such debt as odious debt by the Government of Kenya, acting on behalf of the People of Kenya,” said Raila yesterday in a statement.

He said the Jubilee administration had failed to explain to Kenyans how it spent the proceeds of the Sh250 billion Eurobond issued on June 24, 2104.

The former premier said the Government and the National Treasury had persistently failed to accurately and fully account for the net proceeds of the Eurobond.

UNRESOLVED ISSUES

“This cautionary notice and notification of material facts is based on the concerns and significant and materials unexplained and unresolved issues that arose from the International Sovereign Bond Issued by the Republic of Kenya on 24 June 2014, which are presented above,” he added.

Raila said a significant portion of the proceeds from the first sovereign bond amounting to $999 million (Sh9.9 billion) were not deposited into the Consolidated Fund.

He said the money was not received and thus did not benefit the people of Kenya. Earlier this year, the International Monetary Fund said the Kenyan government accounted for the money in the same manner that other countries do.

IMF first deputy Managing Director David Lipton said the money was moved to the Central Bank’s accounts and then put at the Government’s disposal.