In a statement, Mr Odinga warned of a looming crisis if international lending institutions and investors took part in the proposed bond by Kenya yet the previous funds had not been fully accounted for. He pleaded with the international community to refrain from participating in the Eurobond that has already been proposed by the Kenyan Government. "We wish to place On Notice the Named Persons/Entities (as defined above) that the Government of the Republic of Kenya has not accounted for the receipts and expenditures of the Net Proceeds of the International Sovereign Bond issued on 24 June 2014 as required under the Constitution of Kenya, 2010 and the Public Finance Management Act 2012, and to the satisfaction of the Constitutional National Audit Office." "Further we caution the International markets that the Government of the Republic of Kenya needs to account completely for the Net Proceeds of the Eurobond prior to the Issuance of any new International Sovereign Bond," the statement read in part. The former Prime Minister noted that audit reports by the Auditor General had revealed that the Government had failed to deposit or remit Net Eurobond proceeds amounting to USD 1,999,052,872.97 (approximately Sh203 Billion) into the Consolidated Fund (“National Exchequer Account”) maintained at the Central Bank of Kenya. He highlighted that the Government and more specifically the National Treasury had failed to prove how the proceeds from the June 2014 Eurobond fund had benefited the people of Kenya. "The National Treasury has failed to account for expenditure from the Net Proceeds of the Eurobond to the satisfaction of the Office of the Auditor General. Specifically, the National Treasury has failed to produce or provide a List of Projects funded by the Eurobond," Odinga said. He cautioned that if the international lending institutions would move forward and lend Kenya the second Eurobond in light of the issues raised, then the loan would be declared an odious debt. In international law, odious debt, also known as illegitimate debt, is a legal doctrine that holds that the national debt incurred by a regime for purposes that do not serve the best interests of the nation, should not be enforceable. When a loan is an odious debt, some legal scholars argue that successor governments should not be held accountable for it. Mr Odinga inferred that: "Investors need to demand resolution of the unaccounted for proceeds and all unresolved matters on Kenya’s 2014 Eurobond prior to participating in any proposed future sovereign bond issue." He highlighted that if the loan is termed an odious debt, Kenya would in future face difficulties in accessing Eurobond Funds.
credit:kenyans.co.ke
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