The European Union (EU) has threatened to withhold budgetary supports if the Kenyan government will not implement two post-election violence reports.
European Commission head of delegation to Kenya Eric van der Linden said the Kenyan government should also review the constitution and land policies as agreed during the peace talks that culminated in the Grand Coalition Government.
"We are waiting for the Waki and Kriegler reports to be implemented. The development group is also looking at Agenda Four. We are looking if all conditions are met," Linden said, according to Daily Nation newspaper on Tuesday.
The political elite, the EU said, must exercise good governance and prove a conducive political environment before the bloc can open its purse.
The EU, the largest donor bloc for Kenya, said the implementation of the Waki Report was a non-negotiable basic condition that must be met before Kenya accesses any grant.
Linden said all conditions would be scrutinized before any grants are disbursed to Kenya, which depends on foreign supports to seal the gaping holes in its annual budgets.
"There are certain conditions that must be met by a country in order to qualify for budgetary support. In the case of Kenya, the implementation of the National Accord agreements, which include the Waki and Kriegler reports, is one of the conditions," said Linden.
The move to withhold budgetary supports would have an adverse effect on government programs. The Justice Philip Waki Commission set a 60-day window during which a local tribunal should be established.
The report was categorical that if plans to set up the tribunal were sabotaged, suspects of the violence would be tried at the International Criminal Court in The Hague.
The commission handed over to the chief mediator of the election dispute, former United Nations Secretary General Kofi Annan, a secret list of suspects who should be investigated and tried if found culpable in the violence that left 1,500 dead.
The EU funding would affect funding in education, health, especially the fight against HIV/AIDS, and infrastructure projects, mainly roads construction.
It will especially exert pressure on this year's budget, which has a huge deficit. The government had planned to raise 500 million U.S. dollar from the international market through a sovereign bond. But due to the international financial meltdown, this is no longer possible.
If the EU withholds the supports, the government will be forced to borrow heavily from the local market to plug the budget deficit, causing inflation and interest rates to rise.
Although the constitutional review and land reforms were part of Agenda Four of the coalition deal, the government has been accused of dragging its feet in addressing the two issues.
The country's 2007/2008 budget has a deficit of 5.3 billion shillings (67.5 million U.S. dollars), with this gap of about five percent expected to be largely filled by donors. The EU is one of the top donors.
French Ambassador to Kenya Elisabeth Barbier reiterated that Kenya had no option but to implement the Waki Report to end the culture of impunity.
"The EU strongly supports the implementation of the report and we are keenly watching. There is little time, but there is still time for its full implementation," Barbier said.
She underscored the need for the implementation of the report to prevent recurrence of violence. "We look to Kenyan leaders to implement the report and we will hold them accountable," she said.
She added that the Waki Commission had a complex mandate, but managed to come up with a transparent and thorough report geared to end the culture of impunity.
"The Waki Commission recommended further investigation into sexually-related violence by security agents. It is in the interest of the National Accord to address this issue," she said.
The EU statement sends a chilling message to the political elite roundly condemned for fanning the violence that left more than 1,000 people dead, half a million others displaced and the country at the brink of collapse.
Linden, however, said Kenya enjoys good relations with the EU and he was confident that the recommendations in the two reports would be implemented.
He at the same time announced that the EU would fund development projects in Kenya to the tune of 400 million euros (506 million dollars) for five years if all conditions were met.
"Between now and 2013, Kenya should benefit from 10 billion shillings grants per year. These money will be used in projects relating to energy, drought preparedness, water, infrastructure and rural development," Linden said.