Kenya’s debate on odious debt has moved beyond academic journals and courtrooms into everyday life. It now shapes conversations about taxes, fuel prices, hospital bills, school funding, and shrinking opportunities for young people. This shift matters because debt is no longer merely an accounting issue but a national concern affecting millions of citizens.
The immediate controversy concerns whether portions of Kenya’s public debt were borrowed illegally, unconstitutionally, or without meaningful public benefit. Senator Okiya Omtatah’s petition has brought this question before the courts by challenging substantial borrowing accumulated over the past decade, including Eurobond debt and other liabilities whose authorization, disclosure, and utilization remain contested.
Odious Debt: A Symptom, Not the Disease
The courts will eventually determine what portion, if any, qualifies as unlawful or odious. Yet even if every disputed loan were perfectly accounted for tomorrow, Kenya would still confront a deeper and more persistent problem.
Odious debt is not the disease but rather a symptom of it. The real disease is a development model that has become heavily dependent on borrowing.
For years, Kenya has treated debt as a substitute for genuine economic transformation. Whenever the government sought new infrastructure, expanded programs, increased spending commitments, or relief from fiscal pressure, borrowing provided an immediate solution. Loans enabled leaders to promise development today while shifting much of the cost into the future.
That future has now arrived.
Debt servicing consumes an enormous share of public revenue, leaving fewer resources for classroom decongestion, quality healthcare, universal water access, agricultural extension services, research, and industrial development. Increasingly, public funds flow toward interest payments and principal repayments, leaving the country working harder merely to sustain the consequences of past decisions.
Fungibility, Accountability and Intergenerational Burden
This is where the odious debt debate becomes particularly valuable because it forces us to ask not only whether specific loans were legal but also why Kenya became so dependent on borrowing in the first place.
A useful concept in understanding this issue is fungibility.
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Many citizens understandably ask where every Eurobond dollar went, but public finance rarely works that way. Unlike donor-funded classrooms or specific road projects, sovereign borrowing often enters the Consolidated Fund and becomes part of the broader budget. Once there, money becomes fungible, meaning one shilling cannot easily be distinguished from another. Borrowed funds may simultaneously support infrastructure, refinance older debt, close budget deficits, and finance government operations.
This reality does not make the borrowing illegal, but it does make transparency far more important.
The central question is not whether every borrowed dollar can be traced to a particular brick or kilometer of road. The more important question is whether the borrowing expanded Kenya’s productive capacity and strengthened its ability to generate future wealth.
Did it create industries, increase exports, lower production costs, and generate sufficient future revenue to repay the debt? Or did it merely postpone difficult fiscal decisions while creating larger obligations for future generations?
These questions matter because debt creates what economists call an intergenerational transfer. Officials sign borrowing agreements today, while future governments make the repayments and future taxpayers bear the burden. Children who were not yet born when the loans were negotiated eventually inherit the obligations created by those decisions.
Creditors describe this arrangement as sovereign continuity, but many citizens experience it differently, often seeing it as inherited punishment.
The Constitution anticipated this danger. Article 226(5) provides that public officers who direct or approve unlawful use of public funds can be held personally liable. This principle should play a much larger role in the debt debate, as the conversation should not stop at the question of whether Kenya must repay. It should also examine who authorized questionable borrowing, who benefited from it, and whether accountability should follow.
The Real Challenge: Production Over Debt Dependency
Even so, accountability alone will not solve the larger problem because a country cannot prosecute its way out of a flawed development model.
Kenya’s challenge is that economic growth has become increasingly disconnected from production. We borrow heavily to finance development, yet the productive sectors expected to repay that borrowing remain underdeveloped. Manufacturing struggles, agricultural value addition remains limited, mineral resources leave the country with minimal processing, industrial growth remains uneven, and exports continue growing more slowly than imports. The result is a persistent need for additional borrowing.
For this reason, the debate must move beyond debt and focus on development itself.
The real alternative to debt-financed development is not austerity but production-led, tax-funded development.
A Better Path Forward
This idea requires careful explanation because many Kenyans understandably associate tax-funded development with higher taxes. That is not the point.
Tax-funded development does not mean placing greater pressure on workers, consumers, and small businesses. Kenya has already relied heavily on VAT, fuel levies, excise duties, mobile money taxes, and other charges that disproportionately affect ordinary citizens.
The challenge is different. Kenya must build an economy capable of generating taxable income through production rather than extraction.
A productive economy creates wealth before taxing it. It expands agriculture, manufacturing, mining, technology, logistics, tourism, and value addition while increasing the number of profitable firms, productive workers, and successful enterprises. Government then captures part of that value through taxation and reinvests it in public goods.
This is how most successful development stories have unfolded. Countries first built productive capacity, and revenue followed naturally. Kenya has often attempted the reverse.
I have had the opportunity to be part of the team that drafted civil society’s Kenya People’s Manifesto, which offers a chance to rethink this model. Its Public Finance component advocates debt transparency, fiscal sovereignty, stronger development finance institutions, and fairer taxation. The Productive Economies brief focuses on agriculture, manufacturing, infrastructure, mining, energy, and industrialization. The Infrastructure component examines how public investment can lower production costs and connect neglected regions, while the Public Goods brief explores how public resources should be allocated to healthcare, education, water, transport, and social protection.
Taken together, these proposals point toward a different development logic in which borrowing becomes exceptional rather than routine.
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When debt is used, it should finance assets that expand future productive capacity. Industrial power generation, irrigation systems, freight rail, agro-processing zones, technology infrastructure, ports, and water systems can all create future value capable of servicing the debt they require.
Under such a model, consumption should be financed by revenue, while investment is financed by growth.
Citizens, meanwhile, deserve complete transparency. Every loan should be visible through a public debt portal showing the lender, amount, purpose, approval process, implementing agency, repayment schedule, and project status. Parliament should approve borrowing only after demonstrating clear public benefit, while independent debt reconciliation should establish a single trusted debt register. Where unlawful borrowing occurred, recovery and accountability should follow.
The odious debt debate should not become a shouting match between those demanding blanket repudiation and those defending business as usual.
Kenya needs a third path that combines constitutional accountability, transparent borrowing, recovery from those who abused public finance, and a long-term transition toward production-led, tax-funded development.
The question facing Kenya is therefore much larger than whether certain debts should be paid. The real question is whether we will continue borrowing against the future because we have failed to build an economy capable of funding that future itself.
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This article was written by George Nyongesa, a lecturer of philosophy and logic at the University of Nairobi and Chuka University.
