'It's a grand heist!' Jimi Wanjigi on why President Ruto should not repay current debt

Speaking during The Explainer show on Citizen TV, Wanjigi termed Kenya’s ballooning debt that is currently choking the country’s economy as an “odious” debt, noting that it was unlawfully accumulated by the previous regime of Retired President Uhuru Kenyatta.

According to Wanjigi, President William Ruto should decline to repay the debt to allow for an inquiry which he says would ascertain that indeed Kenya owes no one any debt.

“This debt is not legal or lawful and whatever is not lawful we are not as a sovereign bound to pay and our calculations are correct, we are owed as Kenyans Ksh.1.3 trillion credit; we don't owe anybody,” said Wanjigi.

The former presidential aspirant argues that most of the loans that the government has borrowed both locally and internationally have been mismanaged by top officials while the repayment falls back to the taxpayers who do not benefit from them.

Wanjigi went on to cite the infamous Eurobonds, citing that no single tangible project can be attributed to the Eurobond which is considered one of the most burdensome credit facilities Kenya has accumulated.

 “It is an odious debt; if you didn’t follow the law, why should Kenyans pay? Odious debt is where it did not come to our benefit. Show us where we have benefitted as the sovereign. We should stop paying," he stated.

“They went for Eurobond which is now about Ksh.900 billion, three times; what have they funded? It does not exist!"

The outspoken politician went on to accuse the Central Bank of Kenya (CBK) leadership over the years of overseeing irregular internal debts in a bid to benefit from the bonds.

According to Wanjigi, banks, being among the lenders, are the primary beneficiaries of many of the State’s loans which end up being burdensome to ordinary citizens. 

“Who are the beneficiaries of these interests? The banks and whoever is marketing these bonds. The most recent bond is at 16 per cent, so you and I are going to borrow at about 20 per cent. What is the Ksh.213 billion funding? It is nowhere in the appropriations. So it is not funding any development…so it is for which consumption?” He posed.

"Parliament passes what is seen, as transparent but what the Treasury does, doesn’t follow the law and does its own things. ... It is a grand heist that we have never seen in Kenya.”

Wanjigi cited other jurisdictions like Malaysia and Mozambique which he says Kenya should borrow a leaf from in terms of steps they took in regards to their debts.

“These Eurobonds that you are seeing are a problem. What was discovered in Malaysia is that there were a group of people that were going around doing this (borrowing illegally) and they were caught, same as Mozambique and maybe it is here,” said Wanjigi.

The businessman-cum-politician believes Kenya has more to gain than lose by declining to repay the so-called odious debt.

“We will suffer for a short time but not for a long time. We are too big to fail; we are too strategic and too important, especially when we are showing the whole world, we are prepared to follow the laws. And we as Kenyans, we may suffer. We may see a crazy inflation rate but our revenue is enough to take care of our expenditure,” he stated.

Wanjigi dismissed the debt figures cited by the government, reiterating that the country has already cleared the debt and even overpaid it by Ksh.1.3 trillion.

"We have overpaid our debt, with Ksh. 1.3 trillion, according to our laws- that is our forensic audit," he insisted.

 If the government cannot say no to repaying the debt, Wanjigi says the next option is by declaring debt default.

 “If people are too afraid to go that option then there is the option of debt distress change. The other option is to suffer what Lebanon went through, they declared default; it was forced and the banks just shut their doors with everyone's savings and from 2019, they have not been operating. It happened in Greece as well.”

“Debt distress exchange is an option but it is painful. The shilling will lose value, we'll have high inflation. We'll suffer for a bit but only for a bit. At least we are calling on it and we should be transparent about it and then we take legal action If the government is too afraid to go odious that is what we should take,”  said Wanjigi.

According to the IMF, under the law in many countries, individuals do not have to repay if others fraudulently borrow in their name, and corporations are not liable for contracts that their chief executive officers or other agents enter into without the authority to bind the corporations.