In a case that could redraw Kenya financial future, Busia Senator Okiya Omtatah has taken the question of sovereign debt to the High Court, asking judges to declare that most of the money borrowed during former President Uhuru Kenyatta administration was illegal.
The petition centers on Kenya borrowing between 2014 and 2024, a period spanning the bulk of Uhuru Kenyatta presidency and the early years of President William Ruto administration. According to court filings, the country borrowed approximately KSh9.11 trillion during that time. Omtatah argues that only KSh2.57 trillion was lawfully approved by Parliament through Appropriation Acts, leaving KSh6.54 trillion in what he terms odious debt.
In legal doctrine, odious debt refers to borrowing undertaken without public consent and not used for the public good. Omtatah contends that the disputed trillions were neither subjected to parliamentary scrutiny nor included in approved budgets and therefore should not be binding on Kenyan taxpayers.
Debt battle moves to centre of constitutional test
A central pillar of the case is approximately USD7.1 billion in Eurobond debt, beginning with Kenya debut international sovereign bond issuance in 2014. Omtatah is asking the High Court to declare the entire Eurobond framework unconstitutional and void.
His argument is that the borrowing process violated constitutional provisions governing public finance, including requirements for transparency, accountability and parliamentary oversight. If the court agrees, it could open the door for Kenya to challenge repayment obligations tied to those loans.
However, if the court rejects the petition, the current debt structure will remain intact, leaving taxpayers responsible for servicing loans contracted during the previous administration.
The case has also drawn the attention of international financial institutions. The International Monetary Fund, which has supported Kenya through lending programs, sought to be removed from the proceedings, citing diplomatic immunity.
Omtatah legal team opposed the move, arguing that international lenders cannot finance what they describe as unconstitutional processes and later avoid scrutiny. They claim that such lending contributed to financial burdens now borne by ordinary citizens through increased taxation.
The Chief Justice has empaneled a multi judge bench to hear the matter, underscoring its constitutional and economic significance. The court is expected to address a rare legal question whether a country can repudiate sovereign debt on grounds that it was unlawfully incurred by a prior government.
For many Kenyans, the implications are immediate. Debt servicing consumes a significant portion of government revenue, influencing tax policies such as fuel levies and income deductions. Omtatah petition challenges whether citizens should repay loans that may not have followed constitutional procedures.
If the court invalidates KSh6.54 trillion in debt, Kenya fiscal outlook could shift dramatically. The debt to GDP ratio would decline, potentially freeing resources for public services including healthcare, education and infrastructure.
Critics warn of serious consequences. Financial analysts caution that repudiating international debt could damage Kenya creditworthiness, limit access to global capital markets and weaken investor confidence. The shilling could face pressure and borrowing costs could rise.
Government lawyers are expected to rely on the principle of state continuity, arguing that current administrations inherit both assets and liabilities of previous governments regardless of how those obligations were incurred.
Omtatah, known for public interest litigation, has previously challenged government actions on constitutional grounds. This case represents one of his most far reaching efforts, targeting the legal foundation of Kenya public debt.
The hearings have attracted widespread attention from legal experts, economists and civil society groups. Court proceedings have focused on technical issues including audit trails, parliamentary records and constitutional provisions such as Article 211, which governs public borrowing.
Beyond the courtroom, the case has sparked broader public debate about accountability and transparency in government borrowing. Activists argue that the outcome could redefine how future administrations approach debt.
If the court rules in favor of the petition, Kenya may still need to negotiate with creditors, as a legal declaration alone would not automatically cancel obligations. However, such a ruling could strengthen the country position in renegotiation efforts.
For now, the multi judge bench continues to review extensive documentation, including loan agreements and parliamentary records. The decision, when delivered, is expected to set a precedent not only for Kenya but also for how courts globally interpret the legality of sovereign debt.
