Unless you are a financial expert or an Economic ‘guru’ or you got a passion in reading the term Eurobond remain a vocabulary to you in fact most of those I have talked to do not have the slightest understanding of what this means. Thus this triggered me to come up with this article that expounded on what a Eurobond is and its effect to Kenya economically.
A bond is a form of loan the holder of the bond is the lender (creditor), the issuer of the bond is the borrower (debtor), and the coupon is the interest. Bonds provide the borrower with external funds to finance long-term investments, or, in the case of government bonds, to finance current expenditure. Now Eurobond is an international bond that is denominated in a currency not native to the country where it is issued.
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The Eurobond Scam was conceived by Government as an avenue for external borrowing to facilitate the financing of major projects and also to generate financial capital to meet the deficit between what the government takes in by way of taxes and what goes out in each financial year by way of public expenditure.
Such public debts are national debts which are paid back in a long period of time and eventually affect every citizen; born and not born at the time of acquiring the debt. It is this expanded relationship between the lender and the citizens that makes scrutiny of the public debts critical before and after acquisition.
WHAT MADE EUROBOND A SCAM IN KENYA
I don’t want to evoke political feelings by mentioning the pie papers who led to the Eurobond scam nooooo… I don’t wanna go there my sole purpose is to explain deeply on this Eurobond menace.
The Eurobond became suspect first as a result of its subscription. The government immediately went in for more debts. The cost of these debts had immediate effect on the Kenyan currency was to weaken it. The Kenyan shilling that was strongest across the E. African region suddenly went down and this is where the rain started beating.
Secondly, it took a very long time for the money borrowed to be realized. The time span between the issue and the time of realization led to the thinking someone was unfairly benefiting from the proceeds of the deposited amount by way of interest. It is alleged that this money was not put in the government bank accounts but rather personal accounts, in the Bank of Africa, that are owned by the most powerful family in this country. This was public money and Kenyans had the right to know about it as soon as it was borrowed.
The third reason why the issue of Eurobond is an outright fraud is the lack of budget lines for which the amount was raised. For proper control and prudent fiscal discipline, it is vital to clearly define the budget lines for which funds were being raised and how much money is required thereto rather than merely giving open Cheques to line Ministries in total disregard to public good. As it stands, money was merely being released to government officers to use and give feedback afterwards. Suggestively, the line Ministries and State departments were left free to decide what to do with the money. Such gaps were certainly meant to create avenues for siphoning out the proceeds. In fact, word doing round is that the Eurobond proceeds was received on a Friday and subsequently siphoned out at lightning speed the following Monday
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If this is not answered, the Eurobond will remain to be a scam that will force Kenyans pay 278billion out of the borrowed 176billion money that no one can account for. Money that will be raised by the poor tax payers, this definitely means one thing cost of living will have to go high, prices of commodities will increase and definitely insecurity will be at its peak. It is this fear that have led Kenyans on Twitter famously referred to as KOT to call upon the United States Attorney |General Loretta Lynch
to start her investigation on the Eurobond scam This will make it the biggest corruption scandal ever since
independence.
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