High Court gives Treasury 45 days to reveal details of all Kenya's debt agreements

The High Court has ordered National Treasury Cabinet Secretary John Mbadi to make public details of all debt agreements made on behalf of Kenya, information regarding the country’s sovereign bonds, and issue a comprehensive breakdown of the expenditure of all borrowed funds within 45 days.

In its decision, the High Court declared that failure to provide the treaties, agreements, or contracts signed between the Republic of Kenya and any other state, international financial institution, international corporation, or any other entity, however, described, is unconstitutional insofar as it contradicts the constitutional requirements on access to information under Article 35(1) of the Constitution.

Justice Lawrence Mugambi also ruled that failure to provide information relating to sovereign bonds floated for and on behalf of Kenya in the past nine years by the Executive is unconstitutional for infringing the principle of openness and financial accountability in matters of public finance as required by law.

The ruling by Justice Lawrence Mugambi of the High Court comes five months after he suspended an independent task force constituted by President William Ruto at the height of the Gen Z-led protests, which, among other things, called out the State for an insatiable appetite for debt and financial mismanagement.

The court's decision ended a two-year court battle and is expected to unearth details of the murky preoccupation with borrowing that has become Kenya's "begging culture."

The first administration post-2010 Constitution, headed by then President Uhuru Kenyatta and his deputy William Ruto, was targeted for the secrecy surrounding debt.

“They have 44 days from today. If they fail to comply, we will be holding someone in contempt of court. Let them defy the court, and we will take them the Masengeli way,” stated Advocate Evans Ogada.

The Institute of Social Accountability, under its then National Coordinator Wanjiru Gikonyo and the Kenya Human Rights Commission moved to court in a process that listed then National Treasury CS Ukur Yatani and Attorney General Paul Kihara Kariuki as respondents.

In mounting a robust defence, the Treasury, through then PS Julius Muia, averred that information relating to sovereign bond agreements or any bondholder is protected against invasion of the privacy of an individual investor, much to the dissatisfaction of the petitioners.

“We certainly do not know who authorizes this and where the money goes, yet year in, year out, Kenyans continue to be burdened by all this money borrowed and the bonds executed in the name of the Republic,” Ogada said.

On July 5, 2024, President Ruto said, “I have today appointed an independent task force to carry out a comprehensive forensic audit of our public debt and report to us in the next three months.”

Justice Mugambi, a month later, suspended President Ruto’s task force, constituted to audit the country’s debt. Petitioners argued that the directive overlapped the mandate of the Auditor General.

According to data from the Central Bank of Kenya, Kenya’s economy grew from Ksh.1.8 trillion in 2013 to Ksh.10.6 trillion in June 2024.