Nipate
Forum => Kenya Discussion => Topic started by: RV Pundit on September 13, 2022, 03:16:34 PM
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Ufool had messed up a country
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Fetilizer to 3K for short rains.
KTDA at 3,500 from kshs 5,600kshs
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As of today, the buck stops with Ruto.
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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
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I have to remind you that Kibaki inherited a dead country, did not whine like a biatch, worked hard and moved the country on. Uhuru left a peaceful and somewhat progressive country in areas like infrastructure. Lose Uhurus name from your puny brains, get to work and move the country forward. Ruto should not fall into the Trump trap, Trump was so shocked that he became president that he was showing USA secrets to Russians and Saudi as a brag. Ruto is starting with sijui a village boy became president nonsense, he should shut the fuck up and get to work. Do you know the kind of conditions Jomo and Jaramogi came from, he is not the first village or poverty president. He only looks so villager with his village wife , its hard to remove the village out of them.
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I have to remind you that Kibaki inherited a dead country, did not whine like a biatch, worked hard and moved the country on. Uhuru left a peaceful and somewhat progressive country in areas like infrastructure. Lose Uhurus name from your puny brains, get to work and move the country forward. Ruto should not fall into the Trump trap, Trump was so shocked that he became president that he was showing USA secrets to Russians and Saudi as a brag. Ruto is starting with sijui a village boy became president nonsense, he should shut the fuck up and get to work. Do you know the kind of conditions Jomo and Jaramogi came from, he is not the first village or poverty president. He only looks so villager with his village wife , its hard to remove the village out of them.
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
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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.
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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.
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Taxes have to come down on fuel - and gov has to figure out what or where to cut in the budget
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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/
What alternative does Uhuru Kenyatta have? In economics, we talk of the orthodox and heterodox approaches to dealing with a sovereign financial crisis.
The orthodox approach is a formulaic one-size-fits-all approach which adheres to one economic school of thought known as neoclassical economics. Its prescriptions are fiscal austerity and doctrinaire free market ideology. It is, as is readily apparent, the IMF prescription. Heterodox is another name for unorthodox, and refers to a pragmatic strategy that draws from the entire spectrum of economic ideas from Austrian to Marxist political economy and everything in between.
The dilemma governments have to face is that the orthodox cure is sometimes worse than the disease, but its the one with the money behind it. Heterodox approaches work better, but they require a resolve and an imagination that many governments are unable to muster, especially when they have their backs against the wall.
Can the Jubilee administration muster the resolve for a heterodox response? Doubtful.
Four years ago I contemplated the Jubilee administration ending precisely where it is headed, to wit: I cannot think of a more fitting epitaph for the Jubilee administrations reign of hubris and blunder, plunder and squander, than the rest of the term spent savouring copious helpings of humble pie in an IMF straightjacket. Choices do have consequences. Sobering.
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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).
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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.
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).
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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.
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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.
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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.
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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....
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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.
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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.
The tender is only open to the countrys 93 oil marketing companies. The winner orders the products, which it stores and distributes via the network of the state-owned Kenya Pipeline Company to other marketers, according to demand quotas.
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.
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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.
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If ncpb is given money there is maize ready from farm now's...then millers will have no excuse.Gov should resume strategic maize purchase that idiot munya discountined thinking he was punishing kalenjin...kumbe he was punishing Kenyans.Open ncpb stores and in a few weeks millers will have enough cheap maize
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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.
The tender is only open to the countrys 93 oil marketing companies. The winner orders the products, which it stores and distributes via the network of the state-owned Kenya Pipeline Company to other marketers, according to demand quotas.
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.
Kiraitu screwed up the industry when he was minister for energy, created ERA that put price controls. The industry should be full liberalized the country shouldnt have monthly supply tenders. Even without a coin if a company wins the tender all they have to do is to walk to the nearest bank and they are financed.
NCPB should be relegated to warehousing with receipting system, government has no business buying maize from farmers.
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Strategic maize reserve is needed.. this should be kept for days like now.Strategic fuel reserves too
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Strategic maize reserve is needed.. this should be kept for days like now.Strategic fuel reserves too
Strategic reserve is ok for all critically essential commodities but government shouldn't be in the commodity business.
Meanwhile fuel increased by ksh.20 and starting october kra inflation adjustment on excise duty will be raised. So much for lowering cost of living.
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You don't expect miracles in day two..Ruto has five years..he is fixing things in fundamental way... bleeding has to stop..ufool has messed up the country so much Gachagua says treasury is broke.Ruto promised to fix the mess in two or three years then economy will boom like never before.Ufool damage is extensive and they will pay for it
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The energy sector needs serious reforms..ufool Rubis connection need investigation to ensure this not criminal state capture and conflict of interest..Ruto should refuse to pay those subsidies.. empower small independent petrol station by using national oil..let national oil import fuel for the country..and independent petrol station are affiliated to it.National oil was formed in 1982 oil crisis by moi to fix a similar mess.Now it time to capitalize it and unleash it potential..Rubis can go drying
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You don't expect miracles in day two..Ruto has five years..he is fixing things in fundamental way... bleeding has to stop..ufool has messed up the country so much Gachagua says treasury is broke.Ruto promised to fix the mess in two or three years then economy will boom like never before.Ufool damage is extensive and they will pay for it
This is what Gachagua said...
?s=20&t=7DgP0QuWwF1F7P0BFZo_4Q
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Azimio left Ruto with empty coffers. Ndii is busy at work.
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Gordon Opiyo
3h
Dr William Ruto came in as the master Surgeon.... He promised to deal with the cost of living in 100 days...
He inherited an economy in ICU, bleeding profusely....
So what does a master Surgeon do?
First, stop the bleeding...
What was the problem with the subsidy? 5 companies were getting 7.65 billion every month... In other words, 5 companies have received 68.85 billion since January.... In one year, the 5 companies would have gotten 130 billion, nearly half of what the 47 counties are getting.
What was the impact?
1. 1,200 independent petrol stations petrol stations giving direct and indirect income to about 500,000 Kenyans were shut during the subsidy period... These independent companies controlled 45 %of the market before the subsidy started... President Uhuru and his Co President, Raila (both have huge personal stake in the Petrol Industry) created a scenario that kicked out players that controlled 45% of the market by denying them access to the subsidy program and were in the process of giving the companies connected to them 100% of the market....
2. The payment of the subsidy was completely opaque.. The government was depending on data provided by the 5 companies themselves. Chances of them inflating the data from their side...
So, what is Daktari Ruto doing?
Remember, if you want to get healed, you need to get sindano first...
First, Daktari is bringing back to the market 1,200 players who were unfairly kicked out. This will bring back competition. Daktari is killing the oligarchy and introducing competition...he is bringing back the Petrol Stations owned by kawaida Mwananchi and not just the Dynasties..
Second, Daktari is stopping the bleeding and pilfering of public funds in an Opaque way.... The money saved will go to reduce production costs in Fertilizer...
This is just our 3rd day in power... Within 100 days, you will see the fruits...
Tulia, Daktari ana tibu Kenya..
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The solution is to go back to crisis of 1972 and 1982 - oil crisis - and continue where we left.
The answer is NOCK with KPL - can fix the oil oligopolies - and allow independent petrol stations to thrive.
The National Oil Corporation of Kenya (NOCK), is a state corporation of Kenya founded by Act of Parliament in 1981, with a mandate of participating in all aspects of the Kenyan petroleum industry.[2] The company was incorporated in 1981[2] and began operations in 1984.[3]
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COPIED
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The Fuel Prices Riddle..The question is to reign on the Multinationals hold on the Kenyan Fuel industry
Subsidies are not the answer but STRUCTURED management of the Industry is.
1) Remove the Subsidies,work on the Variables on the Pricing/Costing formuls and on the TAX indices
2.Enhance the Ministry ot Petroleum/Energy/Mining Capacity to align the relevant Parastatals under its watch and harvest the accruing synergies.
-The National Oil Corporation of Kenya(NOCK)
-The Kenya Pipeline Corporation (KPC) on Logistics and distribution and by extension storage
-The Dormant Kenya Petroleum Refineries ltd(KPRL) on refining..upgrade it and harvest the synergies from the new Kipevu Oil Terminal(KOT) and the Kenya Oil Storage Facility(KOSF)..If proven not viable,work on the proposed Lamu Merchant Refinery in Lamu through the LAPSSET corridor.
These parastatals need ro be brought together and be made to work in unison and not in competition with each other and then finally the Energy Petroleum & Regulatory Authority(EPRA) should be on its REGULATORY role but under NOCK..but principality,the Country needs a ROBUST FUELS/PETROLEUM RRSERVOIR POLICY..that would invest in the development of its Storage facilities and assets, say,a reservoir Policy that can cover the Country's requirements snd demands for at least 6-12 Month period as opposed to the now online-use(Ship to Pump) kind of Imports and storage,which is prone to immediate global price movements.
The Country is mature in its Oil & Gas Industry and we should reduce the over-reliance on the Oil & Gas Multinationals that are more on the downstream(Retail & Marketing),like in Nigeria, the Multinationals should be licensed to be on the Upstream only and leave the downstream aspects of the Induatry to the Kenyan Oil Marketing companies .Less roles should be left/given to the current Oil & Gas Multinationals of :-
Shell/Vivo
Total Energies
Lexo
Oil Libya Africa(OLA)
Rubis et al in the downstream but more support given to the mid-tier Kenyan Oil Marketing Companies (OMCs) like:-
Hash
Hass
Astrol
Delta
One Petroleum et al
NOCK should be given the chance to actualise its mandate ..one of them being in control of the monthly Open Tender System(OTS) and the strategic capacity to import at lesst 1/3 of the Country's demands.
Control the monthly Open Tender System(OTS) under NOCK
Increase the storage capacity of the Kipevu Oil Storage Facility(KOSF) to buffer Price hikes as we develop the FUELS STORAGE RESERVOIR policy..we need strategic reserves that can cushion the Country.
LASTLY...Lets work on the Oil & Gas infrastructure development ..starting from :
1) The Tullow Oil fields,the Proposed Lamu/Lapsset Merchant Oil Refinery in Lamu ..manage the Transfer of the same assets to the Indian consortium.
2) The proposed KPRL upgrade and activation of the new Kipevu Oil Terminal(KOT) at the Kenya Ports Authority(KPA) in Mombasa.
3) The Kenya Pipeline Corporation(KPC) logistics upgrade and distribution Mandate.As a midstream Parastatal ,KPC has a role in reducing the pricing and costing of fuel products in the Country. Strategic depots development shall assist..these depots in.
Mombasa
Nairobi
Nakuru
Eldoret
Kisumu and
Sagana..reduce the price of logistics/Storage /transport in those areas and it would have an input in the last price.
4)The development of common-user depots/loading facilities shall also go along way in reducing the price of petroleum products
There is more that can be done on the Petroleum products costing and pricing but MUCH can be harvested within by relooking at the entire chain backwards and go for the low handing fruits that can be managed now and the benefit spread out in the Market and cushion the People.There is alot of waste/cost duplication that can be REWORKED on but majorly the TAXES .
Regards
Eng Dzombo Mbaru
CEO-Mardin Energy Ltd
15th September 2022
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I would also initiate talks with Tullow to do modular refineries in the oil wells. Kenya need about 200K barrels per day.
10 modular refineries in 10 wells in Turkana can process 30K each...more than enough.
Also time to open talks with Museveni on their oil refinery
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PWC named it "Bottom up Refining revolution". It happening in Nigeria.
One modular refinery of 30K barrels require less than 200M dollars - about 20B kshs - kenya to build 10 - require just 2B - money - and payback period is very short.
I say float a bond - buy off Tullow - National Oil to own it - build module refineries - total 3B - dollars - and have KPL extended the line from Eldoret to Turkana South - mere 200Kms.
https://www.pwc.com/ng/en/assets/pdf/the-bottom-up-refining-revolution-part4.pdf
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Subsidies mean that instead of market price the subsidy pays for part of the price. The ksh. 20 increment would have been paid by government. So the biggest companies obviously got the bulk of the cash. Independent retailers without storage obviously suffered, I think that was a major problem. I'd imagine subsidy was paid upfront before distribution.
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Less consumption by my cars means less dollar imports. Less congestion too. Watu wapande matatu.
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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.
I understand that subsidies had to go but they should have been phased out. There is going to be significant inflation near term.
This is the kind of hasty decisions some of us talk about. Its trying to kill beneficiaries of the subsidy but end up destroying the economy.
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There is a lot of scope to reduce petrol price...parliament need to get down once Ndii is finished doing the maths. These levies are based on projection of low oil prices...so this extra money KRA is making...we dont need it.
Subsides are bound to be abused - but taxes everone will benefit. The budget should be made based on target petrol price...so kra knows it will collect 40% of 100shs...meaning 40shs per litre..out 6B litres...Kra will always expect 240B kshs from oil sector...if global oil prices goes higher.. all extra taxes should be reduced so that KRA always takes 40shs...meaning instead of rising to 170 now...with KRA collecting 80shs per litre..that extra 40shs....is what should be reduced at pump prices. So we need to move away from % to static constant figure that KRA will collect every year from oil as per approved budget. Next budget - kra should be given a figure to collect from every liter of oil..40shs per litre...whether oil go high or low...next year they can do 45shs...etc
About 40 per cent of the retail price of petrol is consumed by taxes and levies such as excise, value-added tax (VAT), import declarations fee, road maintenance, petroleum development, petroleum regulatory, railway development, anti-adulteration, and merchant shipping levies.16 Jun 2022
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Chinku is buying Russian fuel at half price.
https://www.businessinsider.in/stock-market/news/china-has-secured-russian-gas-at-a-50-discount-until-the-end-of-this-year/articleshow/94080030.cms
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Agreed,
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Agreed,
precisely
KRA inflation adjustment increase on excise duty needs to be repealed by parliament. Kra should be a collecting agent not a regulator adjusting taxes without parliament approval.
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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.
Hustle fund will be lending to banks that extends the loans to saccos, saccos formed for the sole purpose of borrowing from the fund. There's no derisking its only that now the fund will absolve the risk that fintechs now undertake. The question is why are fintech loans so expensive? I'd think its cause of the opacity of borrowers financial status and obviously lack of collateral.
Details are scanty, I hope atleast they drop the sacco aspect, lend to individuals or entities who are already in business
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Why would you drop cooperatives/saccos?
Retail banking targeting smes have failed - equity bank and others receive billions from some donors for onward lending - but they still charge 20% interest rate.
Banks have failed.
Saccos are engine of our economy...
Hustlers are not comfortable working to banking halls...but are at home in saccos.
Sacco ministry will ensure the sacco build capacity - and improve governances.
Sacco can put in collatoral - individuals cannot.
It also become difficult to manage individuals.
Unless we go fintech - and then we get into re-collection problems.
So saccos de-risk the gov losing it's money - as it attempt to de-risk the lower end borrower.
Individuals and business - have banks, fintech, etc.
Mama mbogas and boda bodas is where real work is required.
I imagine Ruto next job will be to go round the country - creating cooperatives - saccos - of all sorts.
After six months - they should be ready to receive hustler fund.
Hustler fund should be exclusively for SMES - lending individuals say max of 200k - otherwise few fatcats will take all the money.
These should target boda, mama mboga, farmers etc
Hustle fund will be lending to banks that extends the loans to saccos, saccos formed for the sole purpose of borrowing from the fund. There's no derisking its only that now the fund will absolve the risk that fintechs now undertake. The question is why are fintech loans so expensive? I'd think its cause of the opacity of borrowers financial status and obviously lack of collateral.
Details are scanty, I hope atleast they drop the sacco aspect, lend to individuals or entities who are already in business
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Why would you drop cooperatives/saccos?
Retail banking targeting smes have failed - equity bank and others receive billions from some donors for onward lending - but they still charge 20% interest rate.
Banks have failed.
Saccos are engine of our economy...
Hustlers are not comfortable working to banking halls...but are at home in saccos.
Sacco ministry will ensure the sacco build capacity - and improve governances.
Sacco can put in collatoral - individuals cannot.
It also become difficult to manage individuals.
Unless we go fintech - and then we get into re-collection problems.
So saccos de-risk the gov losing it's money - as it attempt to de-risk the lower end borrower.
Individuals and business - have banks, fintech, etc.
Mama mbogas and boda bodas is where real work is required.
I imagine Ruto next job will be to go round the country - creating cooperatives - saccos - of all sorts.
After six months - they should be ready to receive hustler fund.
Hustler fund should be exclusively for SMES - lending individuals say max of 200k - otherwise few fatcats will take all the money.
These should target boda, mama mboga, farmers etc
Hustle fund will be lending to banks that extends the loans to saccos, saccos formed for the sole purpose of borrowing from the fund. There's no derisking its only that now the fund will absolve the risk that fintechs now undertake. The question is why are fintech loans so expensive? I'd think its cause of the opacity of borrowers financial status and obviously lack of collateral.
Details are scanty, I hope atleast they drop the sacco aspect, lend to individuals or entities who are already in business
What collateral would the sacco have if the members aren't contributing anything? The sole purpose of forming the sacco is to borrow from the fund unless I am mistaken. Targeting already existing smes would negate the need to establish saccos. Details is what matters e.g who'd bear the cost of collecting loans? Would the borrows be required to bank with saccos etc .
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I am sure there will be rules that sacco need to meet; banks will be doing risk assessment; I am hoping most of money will go into existing saccos that deal with hustlers; not UN SACCO or Parliament SACCO. In my rural home there are many thriving saccos that lend to tea farmers; those are low hanging fruits; capitalize them; and they will lend to farmers cheaper rate.
SMES - will need to join SACCOs - otherwise it become huge admin overheard - and gov would be forming a bank - not a fund.
I would just channel most of money through COOP Bank - then COOP Bank - will channel to SACCOS - and people can join saccos and apply for the hustler fund. SACCO will demand you bring gurantors.
What collateral would the sacco have if the members aren't contributing anything? The sole purpose of forming the sacco is to borrow from the fund unless I am mistaken. Targeting already existing smes would negate the need to establish saccos. Details is what matters e.g who'd bear the cost of collecting loans? Would the borrows be required to bank with saccos etc .
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And the inflation adjustment excise duty increment nightmare continues https://www.businessdailyafrica.com/bd/economy/inflation-tied-taxes-to-hit-homes-3950356
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Inflation is going to get worse before it settles.
This should have been done CAREFULLY, not callously.
How about rents, are they still going up?
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I understand that subsidies had to go but they should have been phased out. There is going to be significant inflation near term.
This is the kind of hasty decisions some of us talk about. Its trying to kill beneficiaries of the subsidy but end up destroying the economy.
Anyone thinking hasolas were after cheap fertilizer, when clearly they said they wanted unga @ 70 Bob, better take a look at this.... their actions today were quite clear including that hasola with a double cabin...
Expect more Unga trucks "to flip over" in the coming days and weeks.
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KFA was a great entity that died due to corruption. We used to sell all farming products and they in turn will sell it to others. Same model can be resuscitated. It gives farmers an avenue to sell rather than to the greedy middle men and women.