The High Court has ordered the National Treasury to disclose critical information on Kenya’s bilateral loans and sovereign bonds.

The High Court has ordered the National Treasury to disclose critical information on Kenya’s bilateral loans and sovereign bonds, marking a major victory for transparency and accountability in public finance. The judgment, delivered by Justice L.N. Mugambi, found that the Treasury had violated constitutional principles by withholding financial information from the public, as sought by the Kenya Human Rights Commission and Wanjiru Gikonyo in Constitutional Petition No. E179 of 2022.

The court declared the failure to provide information on Kenya’s sovereign debt unconstitutional, highlighting breaches of Article 35 (right to access information), Article 201 (principles of public finance), and Article 10 (good governance) of the Constitution.

The petitioners, supported by the Law Society of Kenya and Katiba Institute, sought access to:

1. Terms and conditions of bilateral and international loan agreements.
2. Details of sovereign bond agreements, including default clauses.
3. Identities and beneficial ownership of bondholders.
4. Utilization of funds raised from sovereign bonds over the last nine years.

The petitioners argued that the lack of transparency in Kenya’s borrowing practices undermines public participation, accountability, and trust in government financial decisions.

The National Treasury, argued that much of the requested information was already publicly available through:

• Annual Budget Policy Statements.
• Sovereign bond prospectuses traded on the London Stock Exchange.

The Treasury also cited privacy concerns, arguing that revealing the identities of individual bondholders could infringe on data protection laws in foreign jurisdictions and violate Section 6 of the Access to Information Act, which limits disclosure of certain sensitive information.

Justice Mugambi rejected the Treasury’s defenses, ruling that:

1. Public Interest Prevails: The public’s right to scrutinize how government loans and bonds are managed outweighs privacy concerns for bondholders.
2. Inadequate Justification for Non-Disclosure: The government failed to demonstrate why the requested information could not be provided, especially since the petitioners sought actual records, not generalized reports.
3. Proactive Disclosure Obligations: Under Article 35(3), the state has a duty to proactively publish critical financial information affecting the nation.

The court issued several key directives:

1. Disclosure Within 45 Days: The Treasury must provide details on:
   • Sovereign bond agreements, including terms in case of default.
   • How funds raised through sovereign bonds were utilized.
2. Declarations of Unconstitutionality: The court declared the Treasury’s failure to provide this information a violation of the Constitution.