Kenya’s debt crisis: A web of questionable dealings

The second term of former Kenyan president Uhuru Kenyatta was marred by a debilitating debt crisis.

Skyrocketing debt and post-election violence are some of the features of former Kenyan president, Uhuru Kenyatta’s second term in office. These issues receive attention in the fourth part of the Africa Uncensored video series, ‘INDEBTED: Kenya’s Journey to a Debt Crisis’.

This episode unpacks the intricacies of the Kimwarer and Arror dam projects, highlighting questionable dealings, financial complications, and the government’s increasing reliance on borrowing. The result is a country grappling with a severe economic recession: jobs are scarce, businesses are struggling, and Kenya is on the precipice.

Why It Matters:

The convergence of the pandemic’s effects, political challenges and debt mismanagement has pushed Kenya into a dire economic situation, necessitating strategic solutions. Highlighting such solutions puts pressure on the government to streamline its agenda and ensure the country deals with corruption effectively.

🧠 What’s Happening:

• The construction of the Kimwarer and Arror dams became a microcosm of Kenya’s struggles, involving questionable contracts, financial irregularities, and lack of transparency.
• The joint venture that won the tender for the dam project raised suspicions because of ownership discrepancies and changes to the contract.
• Italian companies CMC de Ravina and Itinera were involved in the project. But financial complications arose when CMC de Ravina filed for bankruptcy.
• The shift from a public-private partnership to a debt-driven project raised financial responsibility and accountability concerns.
• Italy’s involvement in the project included an insurance premium of €52-million for a €319-million loan, exposing Kenya’s financial inefficiencies.

🏃 Catch Up Quick:

Against the backdrop of economic challenges and political turbulence:

• The Kenyan Kimwarer and Arror dam projects brought contract-manipulation and financial mismanagement issues to light.
• CMC de Ravina’s financial troubles cast doubt on the viability of the projects and Italy’s insurance arrangement.
• Kenya’s increasing debt and reliance on borrowing were exacerbated by the effect of the COVID-19 pandemic.

🖼️ The Big Picture:

During Kenyatta’s second term, Kenya found itself entangled in a web of mismanaged projects, financial irregularities, and rising debt. The dam projects highlighted corruption and financial inefficiencies that strained the country’s resources. As the debt crisis loomed larger and COVID-19 wreaked havoc on the economy, Kenya faced a challenging path forward.

Watch the full investigation here:

INDEBTED: Kenya’s Journey to a Debt Crisis: The Perfect Storm

This investigation was conducted by Africa Uncensored, with support from the Thomson Reuters Foundation and Code for Africa. This is the fourth episode of INDEBTED: Kenya’s journey to a debt crisis series.