Business Minister Vince Cable has refused to respond to concerns raised by the Kenyan Debt Relief Network (KENDREN) about the legitimacy of Kenya’s debt to the UK.
Kiama Kaara, Senior Programme Coordinator at KENDREN wrote to Dr Cable in July, following revelations that some of Kenya’s debt to the UK comes from loans to the corrupt and wildly expensive Turkwell Dam, and for military equipment to the regime of Daniel Arap Moi. Mr Kaara called on Vince Cable to apologise on behalf of previous UK governments for supporting these loans, publicly reveal where all Kenya’s debt to the UK comes from and cancel the £16 million of debt which remains from the deals.
Vince Cable’s office has now said that he will not be replying, and have instead passed the letter on to civil servants at UK Export Finance, otherwise known as the Department for Dodgy Deals. Dr Cable is the Cabinet Minister responsible for UK Export Finance.
In response Mr Kaara told Jubilee Debt Campaign:
“I am appalled that Vince Cable has refused to answer my questions about the UK’s dodgy loans to Kenya, and is instead trying to pass this on to unelected officials to deal with. One characteristic of a democracy is that politicians should be held accountable for decisions taken by their government and not push issues further down the bureaucracy with the hope that the issue will simply go away.”
Following campaigning by Jubilee Debt Campaign, and research by our team of voluntary Dodgy Deals Investigators, it was revealed that between 12 and 68 per cent of Kenya’s debt to the UK comes from loans for the Turkwell Dam hydroelectric project, which was also supported with loans from the French government.
As Kiama Kaara said in his original letter to Vince Cable:
“The contract to build Turkwell was awarded in January 1986. In March 1986 a European Commission official said that the price was “more than double the amount Kenya’s government would have had to pay for the project based on an international competitive tender … The Kenyan government officials who are involved in the project are fully aware of the disadvantages of the French deal … but they nevertheless accepted it because of high personal advantages.” There is evidence these ‘advantages’ included payments to President Daniel Arap Moi, then leader of Kenya under an increasingly repressive one-party state regime. Despite this, we understand ECGD’s guarantees for the Turkwell Dam were issued in August 1986, well after it was apparent the deal was corrupt.
“In the mid-1980s, Kenya’ debt payments were already between 25-30 per cent of export earnings. More debt was clearly unsustainable, never mind for a corrupt overpriced ‘white elephant’.”
Furthermore, in November 2012 the UK government revealed that 11 per cent of Kenya’s debt to the UK comes from communications equipment. Further inquiries by our Dodgy Deals Investigators discovered that this was actually military communications equipment. Kiama says:
“Such a deal was clearly unjust; supporting the military of a heavily indebted one-party state which was by many accounts repressive and included documented cases of torture at the time.”
The Liberal Democrats have a policy to audit debts owed to the UK and cancel that which comes from unjust loans to dictators. However, Vince Cable has so far refused to implement this policy since being in power.
Kenya was excluded from the international debt relief scheme, known as HIPC, because it was ‘not indebted enough’. The previous UK Labour government argued internationally that it should be included, but still refused to cancel the Kenyan debt owed to it.