Court orders Treasury CS to reveal details of Kenya's foreign loans

The High Court has ordered the Cabinet Secretary for the National Treasury to make public details of all bilateral and international loans procured by the Executive from foreign states and international financial institutions for the last nine years.

Justice Lawrence Mugambi on Friday directed the government to share the list of Kenya's foreign bondholders including identities of owners of the beneficial companies as sought by the Kenya Human Rights Commission (KHRC) and activist Wanjiru Gikonyo.

The order requires the government to publicly share the documents detailing the loans building the public debt and how the funds raised through the borrowing were expended, and the order should be complied with in a period of 45 days.

The information to be disclosed by the National Treasury CS and the Attorney General include all sovereign bond agreements and contracts signed by the Government of Kenya and any bond that contains the terms and conditions in case of default as set out in a demand letter written to the two by KHRC on February 7, 2022.

Gikonyo had told the court that the Executive has for years borrowed without transparency in the process or involvement of the public which is contrary to the constitution.

She had sought the High Court's declaration that failure to provide information relating to sovereign bonds floated for and on behalf of Kenya in the past nine years is unconstitutional for not being open and accountable as required under Article 201 of the constitution.

Access to information

The activist also urged the court to issue a declaration that failure to provide treaties, agreements and contracts between Kenya and any other state, international financial institutions, international corporations or any other entity is unconstitutional as the same is in contravention of the constitutional requirements of access to information. And the same were granted by the high court.

"A declaration is hereby issued that the failure to provide information relating to sovereign bonds floated for and on behalf of Kenya in the past nine years by the National Executive is unconstitutional for infringing the principle of openness and financial accountability in matters of public finance as required by Article 201 and; further governance, integrity, transparency and accountability as provided in Article 10 (2) of the constitution," stated Mugambi.

She said the CS's refusal to disclose these details to Kenyans amounts to a violation of Chapter Six of the constitution and other related laws.

The state had argued that the information sought by KHRC and Gikonyo revolves around individual bondholders, which is protected under the Data Protection laws.

It was also argued that disclosing the information on the loans amounted to a violation of investors' right to privacy as provided under sections 6 (1) (d) and (f) of the Access to Information Act.

Additionally, the state argued that this disclosure amounted to offending sections 3 (6) and (7) of the Official Secrets Act. But the arguments were trashed by the court.

"In my view, the (CS for National Treasury) has not provided a proper justification for the denial of the information sought by the petitioners (KHRC and Gikonyo). The CS for National Treasury insists that the information is available in the budget policy statements but what is contained in the budget policy statements are proposals for borrowing and not records of actually what has been borrowed," stated Justice Mugambi.

"My understanding is that the information the petitioners seek is records of what has been borrowed, not proposals that may or may not have been actualised."