We must speak up on debt and sovereignty before it's too late

Treasury CS Henry Rotich during the launch of 2019-2022 economic survey at KICC. Picture taken on 25/4/19. [Beverlyne Musili,Standard]

I don’t hate debt per se. What I hate are dumb debts. A dumb debt is a loan you take out to go on vacation. Or to finance a wedding. You are an idiot if you take out such loans. Even worse, you are a bigger fool if you take out a loan that will push you to the edge of your borrowing limit, or drown your only immovable asset in red ink. These rules apply to natural and legal persons. But equally importantly – and perhaps more so – they apply to small, underdeveloped, states like Kenya. Lenders prey on weaklings like Kenya. China, now the world’s leading lending predator on weak countries like Kenya, is our existential threat.

A country and a state are its economy. You can’t have a viable state without an economy. The reason why Africans -- and others in the Global South – fought for independence was to run their own affairs. Principal among those “affairs” was the economy. You are nothing – zero – as a country if you don’t control the major levers of your economy. That’s why you shouldn’t mortgage your country to international financial barracudas. For too long, Kenya has been tethered to the Bretton Woods institutions – the World Bank and the International Monetary Fund. The two hegemonic institutions have “managed” Kenya for decades. They’ve treated Kenya like a toddler in need of tutelage. And like toddlers, our leaders have obliged them.

As if enslavement to the paragons of Western capital wasn’t enough, Kenya has in the last six years delivered herself into the teeth of the dragon. The fire wasn’t enough for our leaders – they have jumped into the boiling water. What’s alarming is the lack of a national outcry over Chinese debt to Kenya. Our legislators have either been fattened by the Chinese and are asleep at the switch, or the Executive has shared the loot with them. I am told the average kickback from Chinese contracts ranges from fifteen to twenty per cent. The pigs are feeding at the trough and selling the country down the river. In the meantime, the Chinese are laughing all the way to the bank.

By some estimates, China owns more than seventy per cent of all Kenya’s bilateral debt. Consider this – France, Kenya’s second largest bilateral lender only holds a tenth of what Kenya owes. Then throw this in – much of that borrowing from Kenya has taken place in the last six years. This is only bilateral debt. We haven’t even begun to talk about Kenya’s multilateral debt, or the entire external public debt. If you run the numbers, you will realise that Kenyans are foreigners in their own country. The country is owned by outsiders and outside interests in cahoots with a thieving, looting, betrayer class. In the meantime, people are confused and blinded by the fog of the 2022 succession politics.

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I’ve written about China’s appetite for resources, especially in weak countries like Ecuador, Sri Lanka, Sudan, Kenya, and countless others. Several things are constant wherever China lends money. First, large kickbacks to corrupt greedy officials is a given. Second, a maze of collateralised assets is contractually obligated to Beijing in case of default. Third, control and management of the infrastructure built by the Chinese is the preferred tether. Fourth, the contracts usually stretch into the horizon and over it. In other words, the state is tied to Beijing so that it can never extricate itself. It’s a debt trap. There’s a word for these arrangements – bondage. That’s what Kenya has allowed itself to be tricked into. Damnation is nigh.

I am not naïve. Societies borrow money for development. It’s one way to finance economic growth. But 2019 isn’t 1919. Time was when Europeans and Americans fanned throughout the world and got the rights to oil and mineral wealth in the Global South for a song and blatant skullduggery. That’s how for almost a century Western oil companies “owned” the oil industry without oil in their home states. But the era of direct imperialism was challenged and some progress – albeit unsatisfactory – was made. Now it seems we are back to that era again with China reprising what the European imperialists did yesteryear. This is the question – who’s to blame for Kenya’s enslavement this time round? Who is responsible?

Joseph de Maistre, the French philosopher, opined that “a people get the government they deserve.” This is about agency. If the people don’t like their government, they need to change it – kick out the crooks. There’s no larger purpose for the state than to safeguard the sovereignty and independence of the people from bondage and enslavement. That’s why Jubilee’s auctioning of Kenya to the Chinese is intolerable. Kenyans need to speak up before it’s too late – although I fear it might be too late already.

- The writer is SUNY Distinguished Professor at SUNY Buffalo Law School and Chair of KHRC.  @makaumutua

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