Come clean on cancellation of Adani deals, civil society tells state

Adani Group Chairman Gautam Adani. [AFP]

Civil society organisations under the banner of Okoa Uchumi Coalition have said the government must come clean on cancellation of deals with Adani Group.

The coalition has demanded the immediate resignation or dismissal of officials involved in Adani deals and full disclosure of the contracts.

The civil society expressed concern over the liabilities incurred following the cancellation of the contracts and questioned the findings of the investigative report referenced by the President during the State of the Nation address on November 21, 2024.

“The State must come clean on the liabilities caused by the cancellation of the deals and the details of the investigative report that guided the decision to rescind the deals, as cited by the President. Such a report must be made public and action is taken against any Kenyan official found culpable of corrupt practices in the deals,” said Abraham Rugo, co-convener of the Okoa Uchumi, who read the joint statement in Nairobi on Sunday.

Okoa Uchumi raised concern over failure to do due diligence before approving Public-Private Partnership (PPP) contracts with the Adani Group.

The coalition said that Adani’s history of corruption allegations and misconduct should have been a red flag for Kenyan authorities.

“This oversight raises serious questions about the integrity of the due diligence process, which was compromised, and as a result, the interests of the Kenyan people were not adequately safeguarded,” said Rugo.

The civil society called for investigations into Adani deals by the Ethics and Anti-Corruption Commission (EACC) and the Office of the Auditor General.

“We call for the immediate review of all agreements and investments linked to the Adani Group, particularly in critical sectors like Energy, Infrastructure and review of other deals that jeopardise Kenya’s sovereignty, including the Social Health Insurance Fund. Full disclosure of the terms of these agreements and accountability for any improprieties and holding of all the members of the executive who were involved in this irregular contract and who continued to defend it even as Kenyans flagged fundamental issues of viability, transparency and accountability,” said Diana Gichengo, the executive director of The Institute for Social Accountability (TISA).

The organisations include TISA, Centre for Enhancing Democracy and Good Governance, Community Advocacy and Awareness Trust-CRAWN Trust, The Kenya Human Rights Commission, Transparency International Kenya.

Others are the Hummingbird Grassroots Centre, East African Tax and Governance Network, Bajeti Hub, Institute of Public Finance Kenya, Christian Aid International Kenya and Inuka Kenya Ni Sisi.

While acknowledging some economic improvements in Kenya, such as the shilling’s strengthening at 20 per cent and inflation dropping to 2.7 per cent in October 2024, the coalition argued these changes have not translated to tangible benefits for mwananchi.

They argued that prices for basic commodities, including school supplies, remain prohibitively high.

The civil society organisations regretted that new taxes, such as the Housing Levy and Social Health Insurance Fund, have reduced household disposable income, which exacerbates economic inequality.

“Kenyans do not feel any positive impact on their purchasing power despite the easing of inflation due to the high cost incurred by households to access healthcare services and education,” said Rugo.

Debt was another critical issue flagged by the coalition, which expressed alarm over Kenya’s unsustainable borrowing.

With over 70 per cent of tax revenues and nearly half of the national budget allocated to debt servicing, the coalition described the country as being in a "debt trap" rather than on a path to sustainable economic recovery.

They accused the government of lacking transparency in managing public finances and allowing irregularities in state-funded projects to persist.

The coalition cited the Eurobond saga and inflated costs in public projects as prime examples of mismanagement, calling on Parliament to reject proposals enabling unchecked borrowing.

They argued that the new tax measures would further burden taxpayers without addressing the root causes of Kenya’s financial challenges.

The coalition also accused the government of failing to tackle graft effectively.

Despite promises from the President to eliminate wastage and slay the “dragon of corruption,” the coalition said corruption scandals continue to drain public resources without consequences for those implicated.

The coalition accused the government of opaque financial practices in Adani deals, Haiti mission and Standard Gauge Railway contract.

The civil society organisations criticised the government for withdrawal of corruption-related cases and the appointment of individuals implicated in graft to key government positions, which they said undermined public trust.

“The opacity in spending has created opportunities for corruption, all while the drain on public resources further destabilises the country’s finances and ability to address economic and social distress through various mega-corruption deals,” reads the statement.

They questioned the government spending priorities, particularly the Sh2.1 billion allocated to Kenya police deployment to Haiti, despite promises that public funds would not be used.

The coalition argued that the funds could have been better utilised to address pressing domestic issues such as education funding or reducing the national debt burden.

“The fate of the Kenyan-led mission now hangs in the balance of the cash crunch in the face of objections by China and Russia, both of whom are members of the powerful UN Security Council,” said the coalition.