Tag Archives: US-DFC

The Secret Deal: Why Transparency Matters

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Despite the high stakes, the specific terms of the debt-for-food swap remain shrouded in secrecy, sparking legal battles and civil society alarm. A case filed at the East African Court of Justice, Wanjiru Gikonyo v The Attorney General, challenges the government’s refusal to disclose the full details of sovereign debt agreements. Litigants argue that committing future tax revenues and “savings” to long-term projects without public participation is unconstitutional. The lack of a public dashboard detailing exactly how the Sh129 billion will be spent creates a “transparency deficit” that invites mismanagement.

This opacity exacerbates the “sovereignty paradox.” By allowing the US-DFC and WFP to dictate the terms of expenditure, Kenya is effectively admitting that its own institutions cannot be trusted. While external conditionality acts as a safeguard against local corruption, the public remains in the dark about what exactly has been signed away. Are there hidden fees? What are the penalties for non-compliance? Without full disclosure, the Kenyan taxpayer is a passenger in a vehicle being driven by foreign creditors.

Transparency is not just a legal formality; it is the only disinfectant strong enough to prevent the “bureaucratic consignment” of funds. Civil society is demanding that the Treasury publish every shilling of the “savings” and every project beneficiary. Until then, the debt swap remains a “black box”—a deal negotiated in boardrooms in Washington and Nairobi, with the bill sent to the citizen who has no say in the menu.

References:

Afronomics Law Sovereign Debt News Update No. 147: The Promises and Transparency Pitfalls of Kenya’s $1 Billion Debt-for-Food Swap

The Institute for Social Accountability The High Court has ordered the National Treasury to disclose critical information on Kenya’s bilateral loans and sovereign bonds.

Oil and Water: Can Global Finance Fix Local Corruption?

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The “Food-for-Eurobond” deal relies on a dangerous assumption: that savings from international debt relief can navigate the treacherous waters of Kenya’s local bureaucracy without being looted. History suggests this is an “oil and water” scenario—liquid finance attempting to mix with a rigid, opaque system. The recent scandals at the Kenya National Trading Corporation (KNTC) and the National Cereals and Produce Board (NCPB) serve as grim warnings. In the KNTC edible oils scandal, tax waivers meant to lower prices were captured by politically connected firms, resulting in a Sh16.5 billion loss with no benefit to the consumer.

Similarly, the NCPB’s recent distribution of “fake fertilizer”—bags filled with quarry dust—demonstrates how easily “agricultural support” can be weaponized against the farmers it is meant to help. If the swap funds are channeled through these same “bureaucratic consignments,” the initiative risks becoming another slush fund for cartels. The involvement of the World Food Programme (WFP) is intended to act as an “emulsifier,” forcing accountability into the system, but their oversight powers will be tested against deeply entrenched patronage networks.

Experts warn that without a radical overhaul of state agencies, the “savings” will evaporate before they buy a single bag of genuine fertilizer or build a working silo. The structural disconnect between the Treasury’s high-level deal-making and the Ministry of Agriculture’s operational failures remains the single biggest risk. Unless the government bypasses these compromised intermediaries, perhaps by funding private sector credit guarantees instead of direct procurement, the “oil” of finance will float to the top, leaving the “water” of development murky and stagnant.

References:

Milling Middle East & Africa Kenya’s edible oil scandal raises questions over accountability, transparency

AP Farmers in Africa say their soil is dying and chemical fertilizers are in part to blame