Kenya, EAC sued over $ 2.34 billion IMF loan
Kenya’s Attorney General Kihara Kariuki and EAC Secretary General Peter Mathuki were named first and second defendants respectively in a case filed by two Kenyan organizations in the East African Court of Justice.
In a lawsuit before the EACJ, the Peasants League Ltd Company (PLLC) and the Kenya Abolition Debt Network (KABN) sued the government and the East African Community over loans from the International Monetary Union from Kenya.
Kenya is accused of failing to meet the public debt ceiling set by the EAC Monetary Union in its decision to borrow $ 2.34 billion (Ksh 255.9 billion) from the IMF in April.
Through Lumumba and Ayieko Advocates, the two organizations accuse Kenya of continuing to borrow beyond the public debt ceiling set by the EAC, in violation of its own national laws, the EAC treaty and the protocol. on Monetary Union.
They say that by continuing to borrow from the IMF, Kenya violated Article 9 of the EAC Monetary Union Protocol by failing to adjust its net financing in accordance with the public debt ceiling as specified in the EAC. protocol on the monetary union of the EAC.
Both organizations now want the EACJ to oblige Kenya to accede to the EAC Treaty and the EAC Monetary Union Protocol in debt management.
“Kenya recently obtained a loan of about $ 2.34 billion (Ksh 255.9 billion) from the IMF,” said Dick Omondi Olela, the national head of the PLLC.
PLLC is a Kenyan company that brings together small farmers and consumers to promote agroecology, food sovereignty, climate justice and fair trade.
In a joint application, Mr. Olela and David Calleb Otieno, the national coordination of KABN, an NGO which campaigns for the abolition of illegal, illegitimate, unsustainable and odious debts, criticizes Kenya for not having aligned its public ceiling in its public finances. Management laws with that of the EAC Monetary Union.
They argue that: “Kenya has continued to blatantly violate Article 9 of the Monetary Union Protocol by failing and / or neglecting to disclose to the Council on a quarterly basis all the status of its internal and external debts. , including its debts guaranteed by the State, thus denying the Community the advantage of monitoring its implementation of the macroeconomic convergence criteria.
“Kenya being a party to the EAC Treaty and the Protocol on the EAC Monetary Union is bound by the objects and purpose of the treaty and may not use its domestic law to defeat or thwart the objectives of the union. monetary policy of the EAC, ”said Mr. Otieno.
“Total public debt in fiscal year 2019/2021 was around 65.8% of GDP and it is expected to reach around 70.4% of GDP by the end of fiscal year 2020/2021,” said Mr Olela said.
They are seeking an order requiring Kenya to disclose to the Council the status of its domestic and external debts, including its publicly guaranteed debts, on a quarterly basis.
They also want the costs of the case to be borne by both Kenya and the EAC.