Nipate
Forum => Kenya Discussion => Topic started by: RV Pundit on February 19, 2018, 01:08:58 PM
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https://cytonnreport.com/research/kenya---s-public-debt--should-we-be-concerned----cytonn-weekly--7-2018#focus-of-the-week
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Moody's had predicted that last year. soon kenya will have no other option other than to embark on major privatization and liberalization to raise funds and ease debt burden. The grandiose projects will have to be shelved. The new eurobond funds which roadshow has kicked off are to be used to pay earlier eurobond and syndicate loan (not for development just retire debt) https://www.bloomberg.com/news/articles/2018-02-07/kenya-is-said-to-pick-citi-jpmorgan-to-advise-on-eurobond-sale . The interest rates will remain high unless government stop borrowing which is unlikely. Its unlikely that KRA will be able to collect more taxes without forcing formal companies or companies and individuals to go underground(informal). Basically the era of big government in kenya is slowly but surely coming to an end or At least I hope so.
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I totally agree. Time for treasury some parastals..chiefly National Oil and Safaricom. If GOK sold it's 25% share in Safaricom..that would set them 250B.
Moody's had predicted that last year. soon kenya will have no other option other than to embark on major privatization and liberalization to raise funds and ease debt burden. The grandiose projects will have to be shelved. The new eurobond funds which roadshow has kicked off are to be used to pay earlier eurobond and syndicate loan (not for development just retire debt) https://www.bloomberg.com/news/articles/2018-02-07/kenya-is-said-to-pick-citi-jpmorgan-to-advise-on-eurobond-sale . The interest rates will remain high unless government stop borrowing which is unlikely. Its unlikely that KRA will be able to collect more taxes without forcing formal companies or companies and individuals to go underground(informal). Basically the era of big government in kenya is slowly but surely coming to an end or At least I hope so.
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https://www.bloomberg.com/news/articles/2018-02-19/kenya-lost-imf-facility-last-year-someone-tell-the-central-bank
Well Well Well
Its gonna be a rough ride.
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The rough ride was predicted some years back. Jubilee government has tripled Kenya's external debt in less than 5 years. How can that end well? Many of the loans taken since 2013 are yet to mature. We still have a grace period like the loan for the SGR. Let us see what happens when the grace period ends or we can start praying for manna from heaven.
https://www.bloomberg.com/news/articles/2018-02-19/kenya-lost-imf-facility-last-year-someone-tell-the-central-bank
Well Well Well
Its gonna be a rough ride.
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The rough ride was predicted some years back. Jubilee government has tripled Kenya's external debt in less than 5 years. How can that end well? Many of the loans taken since 2013 are yet to mature. We still have a grace period like the loan for the SGR. Let us see what happens when the grace period ends or we can start praying for manna from heaven.
https://www.bloomberg.com/news/articles/2018-02-19/kenya-lost-imf-facility-last-year-someone-tell-the-central-bank
Well Well Well
Its gonna be a rough ride.
Uhurutos won't feel a pinch. The middle class will be starved. The auditor general was nearly run off the road when he dared mention of high debt. Pundits were busy saying the economy will override the debt, but we will wait and see.
To be fair the USA is going through the same thing, borrow and spend.
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Rutos chance to spend his hard earned money on kplc and other low hanging fruit.
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I think they will be mostly sold thro IPOS. But we definitely need to sell Safaricom & National Oil plus all sugar companies owned by the states. Telkom could also be sold if there were someone stupid enough to buy it.
Rutos chance to spend his hard earned money on kplc and other low hanging fruit.
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This will just open up more opportunities for these thieves to steal even more. Do you really think they will use the proceeds to pay the debt when this will present to them a perfect opportunity to steal, plunder and loot. You cannot satisfy Ruto's appetite for stealing.
Rutos chance to spend his hard earned money on kplc and other low hanging fruit.
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Moi government did the initial liberalization of kenya economy not because they wanted to but because they had to. That tipping point is fast approaching where there would be no option other than privatization and full liberalization of the economy. For people who care about economic freedom this a great thing. With free economy the so called "state capture" which is clearly stifling economic growth would be eliminated.
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Corrupt systems are very interesting. While on one end the Treasury will be crying about debts those who have been stealing are seeing opportunities to launder their loot through more loans at a higher interest rate than previous. Capitalism without safeguards is like a cancerous cell.
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Exactly. This will unlock some sectors. Although there is case for gok staying longer in some sectors and probably investing in others..but definitely I don't see why Treasury should own Safaricom when it get taxes and CA is in control. Also a chance for FDI and to grow to capital market.
Moi government did the initial liberalization of kenya economy not because they wanted to but because they had to. That tipping point is fast approaching where there would be no option other than privatization and full liberalization of the economy. For people who care about economic freedom this a great thing. With free economy the so called "state capture" which is clearly stifling economic growth would be eliminated.
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$3B more debt coming...
Kenya starts dollar bond sale despite IMF hurdle
http://www.mediamaxnetwork.co.ke/business/411938/kenya-starts-dollar-bond-sale-despite-imf-hurdle/ (http://www.mediamaxnetwork.co.ke/business/411938/kenya-starts-dollar-bond-sale-despite-imf-hurdle/)
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$3B more debt coming...
Kenya starts dollar bond sale despite IMF hurdle
http://www.mediamaxnetwork.co.ke/business/411938/kenya-starts-dollar-bond-sale-despite-imf-hurdle/ (http://www.mediamaxnetwork.co.ke/business/411938/kenya-starts-dollar-bond-sale-despite-imf-hurdle/)
Govt is no different than an individual. Once you start borrowing from Peter to pay Paul, then soon enough the juggling will run out.
On another note, I listened to Atwoli yesterday and the guy is a very practical and brilliant guy. I was surprised to learn that the big guys who drive big Range Cars rarely pay their taxes, leaving more burden to the middle class.
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Government successfully issued another eurobond https://www.businessdailyafrica.com/markets/capital/Kenya-says-fresh--2bn-Eurobond-oversubscribed-seven-times/4259442-4315350-14pr01l/index.html with longer maturity. The proceeds will pay $800m syndicate and Eurobond first tranche payment of $750m so atotal of $1.55b is to payback loans. The longer maturity means the government is buying more time but will end up paying higher interest rates.
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As expected government has to raise taxes to reduce the budget deficit to more manageable level https://www.businessdailyafrica.com/news/Treasury-to-collect-Sh71bn-IMF-new-petrol-taxes--/539546-4325672-3igckbz/index.html . charging vat on fuel is easy by it will increase inflation and cost of doing business. SGR was suppose to increase 1.5% GDP growth, that hasn't materialized. In addition treasury has been forced to scrap interest caps (terrible law to start with) https://www.businessdailyafrica.com/economy/Treasury-plans-consumer-Bill-to-replace-rate-caps/3946234-4325160-1p5s9sz/index.html . The head of ways and means committee is ichungwa, seriously jubilee is joking, they should get someone at least have way serious like kimunya.
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Yeah things not working out - I see SGR despite rock bottom prices (20K for 20 feet container) is struggling to attract cargo?
As expected government has to raise taxes to reduce the budget deficit to more manageable level https://www.businessdailyafrica.com/news/Treasury-to-collect-Sh71bn-IMF-new-petrol-taxes--/539546-4325672-3igckbz/index.html . charging vat on fuel is easy by it will increase inflation and cost of doing business. SGR was suppose to increase 1.5% GDP growth, that hasn't materialized. In addition treasury has been forced to scrap interest caps (terrible law to start with) https://www.businessdailyafrica.com/economy/Treasury-plans-consumer-Bill-to-replace-rate-caps/3946234-4325160-1p5s9sz/index.html . The head of ways and means committee is ichungwa, seriously jubilee is joking, they should get someone at least have way serious like kimunya.
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Anyone here read the Eurobond 2 prospectus?
[pdf]http://www.ise.ie/debt_documents/Final%20Prospectus%2026.02_7af525f0-c8ad-4270-977f-56a7e5a1cd42.PDF[/pdf]
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Anyone here read the Eurobond 2 prospectus?
[pdf]http://www.ise.ie/debt_documents/Final%20Prospectus%2026.02_7af525f0-c8ad-4270-977f-56a7e5a1cd42.PDF[/pdf]
Argentina, Greece, Portugal, all these countries took in debt like crazy in 1990s, then came the payments.......
Kenya is taking way too much debt.
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Anyone here read the Eurobond 2 prospectus?
[pdf]http://www.ise.ie/debt_documents/Final%20Prospectus%2026.02_7af525f0-c8ad-4270-977f-56a7e5a1cd42.PDF[/pdf]
Thanks for posting the prospectus. Looking at use of proceeds and distribution plan its clear this bond is for paying syndicate loans. The risk, especially budget deficit is one of key risks highlighted. On the positive note, by accessing global debt markets kenya will be forced to make the necessary reforms needed. Already IMF is leading the way to ensure market reforms are implemented.
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Anyone here read the Eurobond 2 prospectus?
[pdf]http://www.ise.ie/debt_documents/Final%20Prospectus%2026.02_7af525f0-c8ad-4270-977f-56a7e5a1cd42.PDF[/pdf]
Thanks for posting the prospectus. Looking at use of proceeds and distribution plan its clear this bond is for paying syndicate loans. The risk, especially budget deficit is one of key risks highlighted. On the positive note, by accessing global debt markets kenya will be forced to make the necessary reforms needed. Already IMF is leading the way to ensure market reforms are implemented.
Reforms, reforms, reforms. IMF should leave the country deal with its on problems, furthermore Kenyans are the ones left paying for these huge loans. (shs4.8 trillion in four years). IMF can recommend, but hyenas also have their own agenda. They counter these reforms and five to ten years later its back to the same point. Example, look at institutional reforms started ten years ago and how Jubilee has dismantled them leaving Kenyans worse off than under Moi. Sad thing is some Kenyans support the dismantling of these reforms because its their man in office.
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Reforms, reforms, reforms. IMF should leave the country deal with its on problems, furthermore Kenyans are the ones left paying for these huge loans. (shs4.8 trillion in four years). IMF can recommend, but hyenas also have their own agenda. They counter these reforms and five to ten years later its back to the same point. Example, look at institutional reforms started ten years ago and how Jubilee has dismantled them leaving Kenyans worse off than under Moi. Sad thing is some Kenyans support the dismantling of these reforms because its their man in office.
Kenya public debt hasn't increased by $48b in four years https://www.centralbank.go.ke/public-debt/ its more like $25b or try debt by GDP www.bloomberg.com/amp/news/articles/2017-07-18/the-charts-that-show-kenya-s-economy-after-four-years-of-jubilee. And what are the institution reforms that been dismantled?
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Reforms, reforms, reforms. IMF should leave the country deal with its on problems, furthermore Kenyans are the ones left paying for these huge loans. (shs4.8 trillion in four years). IMF can recommend, but hyenas also have their own agenda. They counter these reforms and five to ten years later its back to the same point. Example, look at institutional reforms started ten years ago and how Jubilee has dismantled them leaving Kenyans worse off than under Moi. Sad thing is some Kenyans support the dismantling of these reforms because its their man in office.
Kenya public debt hasn't increased by $48b in four years https://www.centralbank.go.ke/public-debt/ its more like $25b or try debt by GDP www.bloomberg.com/amp/news/articles/2017-07-18/the-charts-that-show-kenya-s-economy-after-four-years-of-jubilee. And what are the institution reforms that been dismantled?
Parliament is supposed to be independent but it looks more like the executive.
Since Kibaki, no serious debate has really taken place in Parliament about devolution and how to make it work.
Auditor General was told to shut up or lose his job, so he gets paid to do nothing.
There is supposed to be debate about bgovt. debt, but the treasury just does whatever.
Judiciary is slowly being dismantled to fit the executive.
Law enforcement is for those who oppose govt.
Meanwhile no case has been actively pursued for those who steal from taxpayers. Taxpayers are told - money was refunded.
Total borrowed in four years will be Shs 5.8 trillion by end of 2018.
Read the last paragraph
https://www.standardmedia.co.ke/business/article/2001270355/fear-as-kenya-s-borrowing-hurtles-towards-greece-like-debt-crisis
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Parliament is supposed to be independent but it looks more like the executive.
Since Kibaki, no serious debate has really taken place in Parliament about devolution and how to make it work.
Auditor General was told to shut up or lose his job, so he gets paid to do nothing.
There is supposed to be debate about bgovt. debt, but the treasury just does whatever.
Judiciary is slowly being dismantled to fit the executive.
Law enforcement is for those who oppose govt.
Meanwhile no case has been actively pursued for those who steal from taxpayers. Taxpayers are told - money was refunded.
Total borrowed in four years will be Shs 5.8 trillion by end of 2018.
Read the last paragraph
https://www.standardmedia.co.ke/business/article/2001270355/fear-as-kenya-s-borrowing-hurtles-towards-greece-like-debt-crisis
Total borrowed in 4yrs might be $58b (i'd have to tally) but the overall increment of kenya debt is $25b. Why? Because most of the debt borrowed is being rolled over i.e borrowing to pay old debt. Case in point is the new Euro $2b, almost all of it will go to retire old debt. For the record Kibaki administration which uhuru was part of (finance minister) followed the same economic model of tax,borrow and spend(keysian). The last paragraph "If you include the secret loans, Kenya’s debt will hit Sh5.4 trillion this year from as low as Sh2.5 trillion in December 2014 which is a 116 per cent growth in four years." What are the secret debts? Surely the writer can't be citing Alfred keter supposedly fake Tbills.
For the record Jubilee has done a terrible job with the economy focusing on grandiose projects. Kenya needs a more free, liberalized economy with a very small and less intrusive government.
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Parliament is supposed to be independent but it looks more like the executive.
Since Kibaki, no serious debate has really taken place in Parliament about devolution and how to make it work.
Auditor General was told to shut up or lose his job, so he gets paid to do nothing.
There is supposed to be debate about bgovt. debt, but the treasury just does whatever.
Judiciary is slowly being dismantled to fit the executive.
Law enforcement is for those who oppose govt.
Meanwhile no case has been actively pursued for those who steal from taxpayers. Taxpayers are told - money was refunded.
Total borrowed in four years will be Shs 5.8 trillion by end of 2018.
Read the last paragraph
https://www.standardmedia.co.ke/business/article/2001270355/fear-as-kenya-s-borrowing-hurtles-towards-greece-like-debt-crisis
Total borrowed in 4yrs might be $58b (i'd have to tally) but the overall increment of kenya debt is $25b. Why? Because most of the debt borrowed is being rolled over i.e borrowing to pay old debt. Case in point is the new Euro $2b, almost all of it will go to retire old debt. For the record Kibaki administration which uhuru was part of (finance minister) followed the same economic model of tax,borrow and spend(keysian). The last paragraph "If you include the secret loans, Kenya’s debt will hit Sh5.4 trillion this year from as low as Sh2.5 trillion in December 2014 which is a 116 per cent growth in four years." What are the secret debts? Surely the writer can't be citing Alfred keter supposedly fake Tbills.
For the record Jubilee has done a terrible job with the economy focusing on grandiose projects. Kenya needs a more free, liberalized economy with a very small and less intrusive government.
A debt is a debt, whether i roll it over or not. The former was supposed to be paid anyway.
Well, I agree we will pay for these mistakes. On less govt, I agree too. Theres TOO much govt. consuming too much money. Of course it wont be cut under Jubilee...
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Nyoro makes a powerful argument here. cost of interest from borrowing is less than inflation; if we don't build a road now because we don't want to borrow; 5 years from now that road would be required maybe 5 times the amount of money; if we borrowed today; the interest would be really miniscule and we would have a road.
https://www.nation.co.ke/oped/opinion/Kenya-should-borrow-more-to-fund-projects/440808-4328302-lylossz/index.html
The JKIA-Rironi highway, which will pass through James Gichuru Road, was to be built in 2012 at a cost of Sh25 billion.
That rose to Sh38 billion in 2016. It is now being built at Sh59 billion.
Suppose we borrowed the Sh25 billion in 2012 and built the road immediately. Even if we had borrowed from a Shylock, it would saved the country a lot of money.
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A debt is a debt, whether i roll it over or not. The former was supposed to be paid anyway.
Well, I agree we will pay for these mistakes. On less govt, I agree too. Theres TOO much govt. consuming too much money. Of course it wont be cut under Jubilee...
What matters is outstanding debt, rolling over means the principal is paid by new loan and only interest is being paid( Most mshwari and mobile loans users have mustered the art of rolling over debt :D :D). Because the Euro loans are dollar dominated it means the government has to get insurance policy in form of IMF standby loan to safeguard shilling incase of any external shock. This is where government is being forced to reduce deficit and as result it has resulted in raising taxes on fuel(16% vat) as condition to get the loan.
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Nyoro makes a powerful argument here. cost of interest from borrowing is less than inflation; if we don't build a road now because we don't want to borrow; 5 years from now that road would be required maybe 5 times the amount of money; if we borrowed today; the interest would be really miniscule and we would have a road.
https://www.nation.co.ke/oped/opinion/Kenya-should-borrow-more-to-fund-projects/440808-4328302-lylossz/index.html
The JKIA-Rironi highway, which will pass through James Gichuru Road, was to be built in 2012 at a cost of Sh25 billion.
That rose to Sh38 billion in 2016. It is now being built at Sh59 billion.
Suppose we borrowed the Sh25 billion in 2012 and built the road immediately. Even if we had borrowed from a Shylock, it would saved the country a lot of money.
Am all for KSM-NKR-NRB- MSA-NRB dual. Even if they borrow.
But, Why should the cost double?
Labor costs have not doubled. Materials haven't doubled. The only thing that has doubled is bribery and speculation.
Acquiring land should be done by eminent domain, not market value. If they used that you'll see how fast people will stop buying property along proposed expansions. Costs will come down etc.
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Well - but that is the reality - you don't build now - 5yrs later - it will cost you more than double to do it - so it better to do it now - and repay interest. If we had borrow 25B - the interest would not have be more than 1B. Now we have to pay 30B more.
Am all for KSM-NKR-NRB- MSA-NRB dual. Even if they borrow.
But, Why should the cost double?
Labor costs have not doubled. Materials haven't doubled. The only thing that has doubled is bribery and speculation.
Acquiring land should be done by eminent domain, not market value. If they used that you'll see how fast people will stop buying property along proposed expansions. Costs will come down etc.
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Kenya agreed to cut budget deficit https://www.bloomberg.com/news/articles/2018-03-08/kenya-requests-six-month-extension-of-standby-facility-imf-says to get a standby loan to act as buffer for kenya shilling since all our external debts are dollar dominated. Its either the government cut spending, raise taxes(petrol vat to be applied in setpember), or unload government holding in various companies.
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Anyone here read the Eurobond 2 prospectus?
[pdf]http://www.ise.ie/debt_documents/Final%20Prospectus%2026.02_7af525f0-c8ad-4270-977f-56a7e5a1cd42.PDF[/pdf]
Thanks for posting the prospectus. Looking at use of proceeds and distribution plan its clear this bond is for paying syndicate loans. The risk, especially budget deficit is one of key risks highlighted. On the positive note, by accessing global debt markets kenya will be forced to make the necessary reforms needed. Already IMF is leading the way to ensure market reforms are implemented.
The problem we have is lack of discipline in money matters. There are systems in place to catch the Waigurus, but lack or willingness to enforce the law impedes progress. Deficits will continue to grow as long as the Waiguru protection Act is in place.