Chinese SGR Deal Clause That Took Kenya's Sovereignty

  • One single clause in the Chinese SGR deal with Kenya reportedly took the country's sovereignty on transparency.

    According to Sunday Nation, the confidentiality clause in the SGR loan agreement gagged Kenya from making the intricacies of the deal public.

    "The borrower (Kenya) shall keep all the terms and conditions hereunder or in connection with this agreement strictly confidential.

    "Without the prior written consent of the lender (China), the borrower shall not disclose any information hereunder or in connection with this agreement to any third party unless required by applicable law," the clause states.

    This could be the reason why the SGR loan deal remains marred in secrecy despite questions from several quarters.

    The law demands that Public Procurement Information should be kept public to ensure transparency and accountability as well as curb corruption.

    Reports further indicate that the deal also put the condition that Kenya and its assets were not immune to seizure in case of loan default.

    "Neither the borrower (Kenya) nor any of its assets is entitled to any right of immunity on the grounds of sovereignty or otherwise from arbitration, suit, execution or any other legal process with respect to its obligations under this Agreement, as the case may be in any jurisdiction," clause 5.5 reportedly reads.

    The contract was allegedly signed by National Treasury Cabinet Secretary Henry Rotich and Li Riogu, the then Chairman and President of the State-owned Export-Import (Exim) Bank of China.

    There have been concerns over alleged dept-trap diplomacy by China although Chinese authorities have rubbished the claims in the past.

    For instance, there have been questions whether the Mombasa Port was used as a collateral for the loan or not.

    During a round-table interview with journalists at State House, Mombasa over Christmas holiday, President Uhuru Kenyatta told the members of the Fourth Estate that the SGR loan documents can be made public any time.