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The most glaring thing you will see as you scrutinise our external debt register is an unprecedented upsurge in terms of both number and volumes of syndicated loans from European banks.

Kenya has in the last decade become a big client for greedy European banks seeking to make big bucks from the lucrative sovereign lending business in Africa.

Another trend you will discern is increasing use of opaque and lopsided loan contracts and agreements.

Rather than raise money transparently through public issues or bonds, the economic policy making elite here just love these opaquely- negotiated commercial loan contracts.

The best recent example is a case reported in an analysis in the Sunday Nation of the loan contracts for the corruption-ridden Arror and Kimwarer dam projects where a syndicate of European banks have committed the Kenyan taxpayer to continue repaying Euro 577 million loan that was borrowed to fund non-existent dams.

Another trend you will notice is just how sovereign syndicated borrowing business is becoming murkier and how some European lenders are finding themselves getting enmeshed in corrupt relationships and dealings with political elites.

The best example that comes to mind is the infamous transaction in Tanzania where it was discovered that arrangers in a syndicated loan transaction had surreptitiously jerked up fees to factor in kickbacks and backhanders for corrupt State officials.

In May 2019, ex banker, Detelina Subera entered a guilty plea in New York admitting her part in a money laundering scheme relating to proceeds of a bribe in connection with a syndicated borrowing in Mozambique.

Why is corruption and money laundering becoming a big issue in this space? In the first place, the contemporary practices in the syndicated borrowing space in Africa is that these greedy European commercial creditors do not bother to ask whether the borrowing is going to benefit the citizens of the country or not.

Whether the loan is but a scheme contrived by the political elite and the top government to open up opportunities for syphoning off public funds and channelling it to bank accounts in Panama or the Cayman Islands is not their concern.

The only thing they will insist on is to make sure that contracts are tightly drafted and drawn to firm up the government’s obligation to repay.

The ambivalence displayed by European banks on issues to do with corruption and money laundering- or whether or not the borrowing has benefitted the citizen- should not surprise because most of these lenders also offer private wealth management departments whose clients could well include well- connected individuals with sovereign borrower governments.

In this world, relationships with top government officials – especially in key ministries and dockets such as Finance are highly valued assets for the banks because these are the gatekeepers to their lucrative sovereign lending and private wealth management revenue streams. Does it surprise you that African investigators and prosecutors seeking to prove fraudulent behaviour in murky syndicated sovereign lending transactions don’t get the co-operation from these banks?

It is because European banks have to avoid jeopardising the practices and individuals that keep sustaining valuable revenue streams for them. If you squeal, you not only risk losing private banking revenue but also expose yourself as untrustworthy and not discreet enough to play the game.

Lenders only start cooperating when they are sued in London and New York. Invariably, the tactics they will resort to is to hurriedly negotiate the so-called no prosecution agreements with authorities in Europe and America where they pay huge fines.

We must start by asking very elementary questions: who lent what? Where did the money go? What did the money do for the citizens? Where is the money now?

In cases such as Kimwarer and Arror, the big question is the following: When government officials over- borrow in the name of the people but do not direct those funds to the citizens’ well-being, what should be our recourse as citizens?

Even more pertinent, should we be allowing European lenders to go scot free where loan contracts have been signed in abuse of authority by a corrupt government official?

My parting shot is a quote from UNCTAD’s principle of sovereign lending and borrowing:

“Lenders have a responsibility to determine, to the best of their ability, whether the financing has been appropriately authorised and whether the resulting credits are valid and enforceable under the relevant jurisdictions”.

The writer is a former managing editor of The EastAfrican.

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