Gagging Global Witness & the Kenyan Commercial Debt Problem

Kenyans may soon know how much we owe to commercial creditors. 

It is now settled that Kenya ’s public debt portfolio of US$10 billion is a matter of concern.  That a substantial portion of it – over US$1 billion – relates to uncertain commercial creditors is a matter of urgent national importance. That by the admission of senior Treasury officials, some of the entries of commercial debt are falsified is a national scandal – exemplified by the 18 security related contracts worth over US$ 777 million – mostly guaranteed by irrevocable promissory notes whose whereabouts have never been explained, and to creditors who the Government’s own Controller and Auditor General says are non-existent.

Between Anglo Leasing and Pending Bills Kenyans have been saddled with at least US$ 2 billion of odious debt. So Kenyans should be aware that the Kenyan Minister of Finance, Amos Kimunya, is scheduled to go before the Kenyan Parliament on July 11th 2007 to provide a complete and accurate list of all commercial public debts and to identify the creditors.  We hope he does his public duty.  But we are not holding our breath.

Only last week (July 3rd) the Minister appeared before Parliament to explain the floating of a sovereign bond of US$150 million and was reminded by the Speaker of Parliament, Francis ole Kaparo that one of the prime duties of Parliament is “to have the Executive account to it on the acquisition and utilisation of public funds.”  The Speaker also urged Mr. Kimunya to “be as candid as possible because he is informing the Kenyan people who, ultimately, will pay.”  Only such candour will avoid the problems that countries such as Cameroon, Sierra Leone, Nicaragua, Uganda, Guyana and Congo have faced due to vulture fund litigation.  According to an IMF Report of August 21st 2006, vulture funds are remarkably successful as they litigate around the world – winning 26 out of 44 cases the IMF was tracking at that time.  Since then, of course, Zambia took a multi-million dollar hit from Donegal International Limited.

On this note we have learnt of legal proceedings against Global Witness (the respected international advocacy group) in the courts of Hong Kong and London, England, brought by Dennis Christel Sassou-Nguesso.  Mr. Nguesso is seeking orders to prevent the publication of details of rather large purchases of a personal nature that may be related to the sale of Congolese state oil.

We think it is a crying shame that while 70% of the citizens of Congo Brazzaville live on less than a dollar a day, Dennis Christel Sassou-Nguesso, the son of the president of Republic of Congo, and a public servant to boot, appears to have spent hundreds of thousands of dollars of money that may derive from sales of state oil on lavish designer shopping sprees in Paris, Marbella and Dubai. 

More shameful is that this profligacy was revealed during litigation against his country by a vulture fund known as Kensington International which itself seeks to extract close to US$ 300 million from the Republic of Congo for a debt of US$ 80 million which Kensington acquired for only US$10 million.

Congo remains one of the poorest and most indebted countries in the world, and surely deserves some respite from amoral creditors and immoral leadership.  To that end we wish to go on record in support of Global Witness and the work it is doing to expose corruption and the illegitimate exploitation of the natural resources of the world’s poorest.