Ruto - subsidies gone

[RV Pundit]

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Ufool had messed up a country

[RV Pundit]

Fetilizer to 3K for short rains.
KTDA at 3,500 from kshs 5,600kshs

[Fairandbalanced]

As of today, the buck stops with Ruto.

[patel]

Day 1 and here we were talking about the first 100 days...pedal to the metal all the way.....matiangi could barely keep up with 4am national security briefing.  Pombe ni hasara tupu

[Fairandbalanced]

[KenyanPlato]

precisely..ruto is a conman. now is unable to figure what to do. he will fail kabisa. If MRS gatabaki ndii is his savior I pity him. he needs to recall Sally Kosgey to manage his statehouse. he needs Feanklin Bett. not Akina itumbi and Farouk

[hk]

Ruto's directives Subsidies, The price of fuel will rise increasing the already high inflation. While removing subsidies is good it should be followed up with reduction of taxes on fuel. But government needs money to fund the huge budget, plus IMF conditions for loans would be breached.  Subsidizing fertilizer (production) without a solution to bring down cost of fertilizers means the public will only continue to pay for inefficient farmers.  This isn't a longterm solution.
Hustler fund and housing scheme.  Kenyans are already accessing unsecured loans from banks, mobile loans etc, the question is the cost(interest rates). The prudent thing would be to lower interest rates but that means fiscal responsibility. Besides why would taxpayers shoulder the risk of lending without collateral instead of private sector? Low cost housing scheme to provide jobs is just like kazi mtaani . The solution would be to address land and cost of building especially materials. To finance this we need to securitize mortgages and debt in general so that pensions, investors  etc can invest in the sector instead of treasury bonds.   

[RV Pundit]

Exogenous risks - things we cant control - fuel, fertilizers - we can only mitigate their impact.
Things we can control - housing, taxes, etc,
I believe Ndii is driving the agenda - and therefore we have to see his thoughts.
He philosophy is to go against IMF/WB and try what he call unorthodoxy ways to get out of this economic rut.
Risky but anything is better than IMF.
Ruto will clash with IMF/WB a lot...that is given.

Ruto's directives Subsidies, The price of fuel will rise increasing the already high inflation. While removing subsidies is good it should be followed up with reduction of taxes on fuel. But government needs money to fund the huge budget, plus IMF conditions for loans would be breached.  Subsidizing fertilizer (production) without a solution to bring down cost of fertilizers means the public will only continue to pay for inefficient farmers.  This isn't a longterm solution.
Hustler fund and housing scheme.  Kenyans are already accessing unsecured loans from banks, mobile loans etc, the question is the cost(interest rates). The prudent thing would be to lower interest rates but that means fiscal responsibility. Besides why would taxpayers shoulder the risk of lending without collateral instead of private sector? Low cost housing scheme to provide jobs is just like kazi mtaani . The solution would be to address land and cost of building especially materials. To finance this we need to securitize mortgages and debt in general so that pensions, investors  etc can invest in the sector instead of treasury bonds.   

[RV Pundit]

Taxes have to come down on fuel - and gov has to figure out what or where to cut in the budget

ALHAMDULILLAH. We will no longer subsidise G-Wagons, Porches & Bentleys @ahmednasirlaw pic.twitter.com/icwRNuTAGV

— Mohamed Wehliye, MBS (@WehliyeMohamed) September 13, 2022

[RV Pundit]

To understand Ruto/Ndii economic policy - this few paragraphs will explains
https://www.theelephant.info/op-eds/2019/12/06/an-imf-straightjacket-is-a-fitting-end-to-jubilees-reign-of-hubris-blunder-plunder-squander-and-abracadabra/

[hk]

Exogenous risks - things we cant control - fuel, fertilizers - we can only mitigate their impact.
Things we can control - housing, taxes, etc,
I believe Ndii is driving the agenda - and therefore we have to see his thoughts.
He philosophy is to go against IMF/WB and try what he call unorthodoxy ways to get out of this economic rut.
Risky but anything is better than IMF.
Ruto will clash with IMF/WB a lot...that is given.

Ruto's directives Subsidies, The price of fuel will rise increasing the already high inflation. While removing subsidies is good it should be followed up with reduction of taxes on fuel. But government needs money to fund the huge budget, plus IMF conditions for loans would be breached.  Subsidizing fertilizer (production) without a solution to bring down cost of fertilizers means the public will only continue to pay for inefficient farmers.  This isn't a longterm solution.
Hustler fund and housing scheme.  Kenyans are already accessing unsecured loans from banks, mobile loans etc, the question is the cost(interest rates). The prudent thing would be to lower interest rates but that means fiscal responsibility. Besides why would taxpayers shoulder the risk of lending without collateral instead of private sector? Low cost housing scheme to provide jobs is just like kazi mtaani . The solution would be to address land and cost of building especially materials. To finance this we need to securitize mortgages and debt in general so that pensions, investors  etc can invest in the sector instead of treasury bonds.   

IMF prescriptions aren't supply side economics. IMF/WB advocates for keysian tax and spend policies. E.g  Forced kenya to impose tax on fuel so that it could finance its huge budget spending . Withdrawing spending would cause immediate shock to the economy but set base for organic growth driven by economic fundamentals. The point is with the directives we can see liberal economics policy aimed at addressing demand but we don't see supply side economics to address supply (borrowing from the whole spectrum of economic ideas).

[RV Pundit]

I believe Ndii is proposing that approach - both supply and demand side - not IMF straightjacket. The details are scanty but he says he has been working 16 hours a day - so Ruto will soon be giving us details - we might have supplementary budget as 1st bussiness.

Personally I am for policy experimentation - countries that made it big - went for the unchartered territories - those that follows conventional way dont get far.

South Asians for example went for export led manufacturing when IMF was proposing import substitution which was counter-intuitive - but look where they are - they focussed outside - made stuff they didnt need - got the money and wealth - now they make stuff they can also buy.

My life since Supreme Court upholding of @WiiliamsRuto win. Minimum 12hr working day, yesterday a record 16hrs. Hopefully it all comes together today. Congrats William Ruto. Well done Kenya Kwanza Happy inauguration day everyone. #AKenyaForEveryone

— David Ndii (@DavidNdii) September 13, 2022

IMF prescriptions aren't supply side economics. IMF/WB advocates for keysian tax and spend policies. E.g  Forced kenya to impose tax on fuel so that it could finance its huge budget spending . Withdrawing spending would cause immediate shock to the economy but set base for organic growth driven by economic fundamentals. The point is with the directives we can see liberal economics policy aimed at addressing demand but we don't see supply side economics to address supply (borrowing from the whole spectrum of economic ideas).

[hk]

We can only go with what has been proposed. Hustle fund its basically government trying to address a problem without addressing the causation. Ask yourself which successful company you know that was initiated by people teaming up to borrow the seed capital? Most likely successful companies raise startup capital before borrowing. The fundamental question aught to be how to raise capital privately, how to incentivize capital holders to invest in risky zero physical goods collateral businesses.  Take something like boda boda, if a group was formed to borrow capital to buy motorbikes, the result would be flooding of the market with motor bikes depressing incomes in the industry, eventually the market stagnates. Capital allocation should be driven by demand and ultimate return on investment.

[RV Pundit]

Again the details are too scanty to critique. From what I heard - Hustler Fund - will be available to cooperatives - who will then lend at low interest and assist in collections. That is why Ruto is forming the ministry of cooperatives & SMES. Cooperatives are the real engine of our economy and we are 7th largest in the world. So the details are not there...but proposal is that you go to well run cooperative - get hustler nation low interest loan..and use it. You can use it to buy anything. You repay cooperative as always. Coop is the one to borrow from hustler fund. This will be revolving fund - so gov will inject less and less money because folks will repay.

Of course it would be mistake to use the failed model - of groups - that youth and women funds have become. Coop right now generally lend members money - so this will be big shot in their arms - and they will be able to lower interest to single digit - and Mama Mboga will start to turn profit.

So I think you're focused on private segment - which is okayish but - hustler fund - is focused mostly on SMES - which private banks have priced out of lending business or do so at very high interest. The hustler fund is therefore de-risking this huge segment - everything else applies.

Same with housing - gov is dealing with land, infra and mortgage difference - again de-risking the low cost segment of housing.

We can only go with what has been proposed. Hustle fund its basically government trying to address a problem without addressing the causation. Ask yourself which successful company you know that was initiated by people teaming up to borrow the seed capital? Most likely successful companies raise startup capital before borrowing. The fundamental question aught to be how to raise capital privately, how to incentivize capital holders to invest in risky zero physical goods collateral businesses.  Take something like boda boda, if a group was formed to borrow capital to buy motorbikes, the result would be flooding of the market with motor bikes depressing incomes in the industry, eventually the market stagnates. Capital allocation should be driven by demand and ultimate return on investment.

[KenyanPlato]

Hk ,
I hope ruto won't govern using his campaign theories. I've been asking myself the same questions. actually instead of the subsidies going directly to suppliers why not give farmers the money. let the price of the Commodity be market driven.

[RV Pundit]

Hustler Fund will be similar to what COOP bank is for Saccos. Maybe gov should just give the money to COOP Bank- who already have structures in places - but make sure the money is shared equitably to all Saccos.

We want to hear thousands of stories like this in 5yrs....

[Nowayhaha]

Can someone tell me why we still get ool from KSA ? and Re-exported oil from China Where as the Cheapest oil now is from Russia.
Who own these companies with monopoly in oil import and how is the subsidies paid or awarded.
Is Ruto planning to liberize the oil market in Kenya.
When it comes to government matters Ruto usually doesnt expose inside dealings . When you see him doing something its well calculated and thought out.
Even when Raila, Uhuru, IEBC and NSAC were trying to steal the elections he handled in a manner that it backfired for Azimio.
Imagine if this was Raila and Azimio politicians they could have plunged the nation in something we would be regretting now.
Unga Subsidy was away of availaing funds for Azimio campaigns.
We now need to know the real players in the Kenyan oil market.

[RV Pundit]

Small connected players win the contract to import oil every three months on behalf of the entire industry.
Remember triton.
We need to either allow individual oil companies to import their oil from wherever
Or national oil/kenya pipeline - should import - and sell to all.

Right now - gov float tender every 3 months - and lowest cost importer (small shadow firms) then get financed by banks with oil held by KPL as collateral.
.

Can someone tell me why we still get ool from KSA ? and Re-exported oil from China Where as the Cheapest oil now is from Russia.
Who own these companies with monopoly in oil import and how is the subsidies paid or awarded.
Is Ruto planning to liberize the oil market in Kenya.
When it comes to government matters Ruto usually doesnt expose inside dealings . When you see him doing something its well calculated and thought out.
Even when Raila, Uhuru, IEBC and NSAC were trying to steal the elections he handled in a manner that it backfired for Azimio.
Imagine if this was Raila and Azimio politicians they could have plunged the nation in something we would be regretting now.
Unga Subsidy was away of availaing funds for Azimio campaigns.
We now need to know the real players in the Kenyan oil market.

[Nowayhaha]

The Boldest Decision taken by President @WilliamsRuto  yesterday was bringing to an end the FUEL SUBSIDY.

The Subsidy was just a way of a few people making money including Multi-Nationals.

Kenyan tax payers were paying to assure those people Profit. pic.twitter.com/9xTPIhPBvD

— -Dennis Itumbi, CBS (@OleItumbi) September 14, 2022

[audacityofhope]

The Boldest Decision taken by President @WilliamsRuto  yesterday was bringing to an end the FUEL SUBSIDY.

The Subsidy was just a way of a few people making money including Multi-Nationals.

Kenyan tax payers were paying to assure those people Profit. pic.twitter.com/9xTPIhPBvD

— -Dennis Itumbi, CBS (@OleItumbi) September 14, 2022

Why the stories? Ahadi ni deni. WSR does not drink. He was sober when he promised Unga at 70/=. Campaign promises are supposed to be kept. I feel for Boda boda who voted KK - for less pain at the pump. Watangoja tu vile Jubilee wali promise Laptops & stadiums.