Omtatah, eight others file fresh suit over Ruto's 'odious' debts

Busia Senator Okiya Omtatah has filed a fresh petition in court seeking to halt President William Ruto’s administration from incurring further loans or repaying new debts not authorised within the national budget.

The petition filed jointly with Dr Magare Gikenyi, activist Eliud Matindi, and six other petitioners, accuses the Executive of engaging in a rampant and unconstitutional borrowing spree that could plunge the country into a full-blown debt crisis.

“Even as this case is being filed today, the President is reported to have incurred loans worth Sh143 billion from China without the approval of Parliament. The money is borrowed outside the national budget, the Appropriation Act, 2024, and therefore is not tied to any development projects,” says Omtatah in the court documents.

The petitioners filed a new suit on Thursday after they withdrew an earlier one, which was already being heard, citing technicalities.

They are asking the court to issue an urgent order blocking the government from taking or repaying any new loans unless they are transparently approved by Parliament and aligned with the Constitution and the Public Finance Management Act (PFMA).

Among the allegations listed in the lawsuit are that the executive is secretly borrowing billions without parliamentary oversight, which strikes at the heart of the country’s fragile public finance system.

The lawsuit comes after months of pressure on President Ruto’s administration, which has already faced criticism for rising taxes and the high cost of living.

“The National Executive has failed to respect, uphold, and defend the Constitution of Kenya, 2010,” the petitioners argue

“To uphold the rule of law and good governance, it is necessary that this Honourable Court intervenes immediately by issuing a temporary order prohibiting the National Executive and its agents, howsoever acting, from repaying any loans or debts which were borrowed or incurred without being approved/contained in an Appropriation Act.”

In their detailed petition, the applicants paint a grim picture of the country’s debt landscape.

Between July 1, 2024, and March 28, 2025, the Executive is said to have borrowed Sh1.045 trillion, despite only Sh170 billion having been allocated for development expenditure in the national budget.

“That means over the period, they have unlawfully and unconstitutionally borrowed approximately Sh875 billion, which amounts to Sh97 billion per month. Computed per day, the amount is approximately Sh 3.24 billion. And per hour it is Sh135 million per hour,” the petition reads in part.

According to the petitioners, Kenya’s “odious debt” as of November 30, 2024, totals a staggering Sh13.1 trillion which was similarly incurred unlawfully and unconstitutionally.

Citing a December 27, 2024, Central Bank of Kenya Weekly Bulletin, the petitioners note the total outstanding public debt stood at Sh10.79 trillion, Sh5.6 trillion in domestic loans, and Sh 5.188 trillion in external borrowing.

However, their analysis reveals that this figure does not align with what the National Treasury has reported.

“Only Sh6.95 trillion of the debt is traceable in Treasury records. This means there is a Sh6.16 trillion discrepancy, which suggests the CBK could be facilitating or recording debts that the Treasury does not,” the petition warns.

Even more damning, the petitioners argue that Kenyans have overpaid the national debt by more than Sh2.3 trillion over the past decade.

From 2014 to 2024, Kenya borrowed a total of Sh5.25 trillion, but repaid Sh8.92 trillion, an excess of Sh3.66 trillion, even before interest is factored in.

“If we factor in an interest cost of Sh1.33 trillion, it still means taxpayers have repaid all public debts with a surplus of Sh2.32 trillion,” the petitioners said.

They further argue that public funds purportedly spent on development cannot be fully accounted for.

Between 2014 and 2024, they estimate that Sh22 trillion was supposedly invested in development projects.

However, the petitioners contend that the budget records only show an average of Sh750 billion allocated to such projects annually.

“That means Sh1.45 trillion per year nearly 66% of the supposed development spending is fictitious,” the petitioners claim.

“That kind of money could have built 35 Standard Gauge Railway (SGR) projects, each costing Sh500 billion.”

Further, they reveal that data from the Controller of Budget shows that actual absorption of development funds averaged just Sh506 billion annually, raising questions about the whereabouts of the remaining Sh1.69 trillion per year over ten years, amounting to nearly Sh17 trillion in unaccounted development spending.

“ Therefore, based on those reports, which give the actual expenditure of Sh1.694 trillion per financial year, aggregating to Sh 16,94 trillion, in the ten financial years 2014/2015 to 2024/2025, cannot be accounted for,” Omtatah says.

Additionally the petitioners are aggrieved that it has been a matter of public notoriety for a very long time, to date, the EACC has not carried out any investigations into any of the four batches of Eurobond loans amounting to USD 2,000,000,000, USD 1,000,000,000, USD 3,100,000,000, and USED 1,000,000,000.

They claim, these were unlawfully and fraudulently borrowed, respectively, in the financial years 2014/2015, 2017/2018, 2018/2019 and 2020/2021.

“We are aggrieved that, to make matters worse, the fraudulent Eurobond loans are NOT even mentioned among the cases reported to be under investigation by the Commission in its report titled, ‘Report of Activities and Financial Statements for the Financial’, for the financial years 2018/2019, 2019/2020/ 2021/2022, and 2022/2023,” the state.

In the court papers, the nine petitioners fault the  EACC for concealing and aiding and abetting the Eurobond loan fraud by deliberately claiming and misleading the public, vide its Press Release dated December 4th 2015, that the Commission was investigating the matter, yet it was not doing so.

The petitioners now want the court to issue a conservatory order stopping further borrowing, citing the risk to public interest and the continued violation of the Constitution.

 “Unless this application is urgently heard and determined, the people of Kenya will suffer great loss as the Constitution and the rule of law, as regards public borrowing, will continue to be violated,” they argue.

The activist further accused the National Assembly of failing on its duty to protect the Kenyan taxpayer from the burden of odious debts.

“National Assembly violated the Constitution by creating an unconstitutional loophole in the law that allowed the Cabinet Secretary responsible for Finance to loot public coffers by side-stepping or bypassing the express and mandatory provisions of Article 206 of the Constitution,” the petitioners, led by Omtatah, argue.

The petitioners also seek several reliefs, including that ‘On-lent loans’ are unconstitutional and by advancing ‘On-lent loans’ to Kenya, the International Monetary Fund (IMF) violated Kenyan law on borrowing.

They want President William Ruto and his predecessor, Uhuru Kenyatta be forced to personally pay a total of over Sh 4.6 trillion for allegedly odious debts corruptly acquired under their watch in the FY 2014/2015 to 2021/2022.

While the former treasury cabinet secretary, Njuguna Ndungu, the  Controller of Budget, Margaret Nyakang’o, and the auditor general, Nancy Gathungu, were forced to pay Sh 2.2 trillion for allegedly odious debts corruptly acquired under their watch in the financial years 2022/2023 to 2024/2025.

The case is pending hearing.