Nipate
Forum => Kenya Discussion => Topic started by: RV Pundit on October 07, 2015, 05:06:29 PM
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They are borrowing money at shylock rates of 20-30%
http://mobile.nation.co.ke/blogs/The-high-interest-rates-/-/1949942/2901874/-/format/xhtml/-/sa6qs8/-/index.html
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In my own private economy, I try to ensure I only spend money I have and that spending is within the limits of income. Since Uhuru came to power I noticed an extravagance that pointed at a man with no discipline. He used state resources the way he splashed his brother's money leading to him being placed on a strict budget.
How long will they hide it? The speculators already know and they gonna raid the shilling to reduce it to the shell it is.
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As long as there's no anyone opposing or making noise it's ok. Reminds me of george bush .
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There are more important things to deal with, such as who fixed the Hon. Deputy President.
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Moon Ki yes there are more important things. Sad!!!
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My signals went up when profit alerts and warnings were issued all over at start of the year ..... What this means is tax evasion and evading is now at all time high .... I believe mainly it is in reaction to high level corruption (private sector way of protests) and fact that most of the companies are owned by those close to power doesn't help (what explains Java 1 b taxes while we never hear of Brookside among top taxpayers??) ... SMEs have followed ...then individuals ...
Left with only public sector PAYE and some VAT it was not going to take long before we got here (can we really say public sector workers paid by taxes can pay taxes or Treasury just does funny monkey business with KRA and declares TSC biggest taxpayer) ... It is still a golden opportunity to bring sanity to public spending but no one has the discipline and the moral authority
http://www.businessdailyafrica.com/Corporate-News/Dividend-drought-looms-as-12-firms-in-profit-warning/-/539550/2631908/-/86ef9p/-/index.html
As long as there's no anyone opposing or making noise it's ok. Reminds me of george bush .
it is not a matter of opposing - state of economy hits hard and is personal... already MPs are crying, teachers September salary, counties 3 mths arrears....now think of knock on effect of just that; unpaid debts/suppliers(private sector) all over the country
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it is not a matter of opposing - state of economy hits hard and is personal... already MPs are crying, teachers September salary, counties 3 mths arrears....now think of knock on effect of just that; unpaid debts/suppliers(private sector) all over the country
That's a lot of affected people. So what are doing about it? What are they even just saying about it? As long as people meekly take it, they will continually have it socked to them.
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GoK ios either keeping quiet about being broke or using proxies to deny. The bills are piling. I saw many roads whose contractors have parked the machinery and stopped working. Reason No Money. Now we know schools have not received their money leading to non teaching staff going without salaries. County Governments are crying out and Parliament had electricity disconnected. The JSC has no cash. The list is long.
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GoK ios either keeping quiet about being broke or using proxies to deny. The bills are piling. I saw many roads whose contractors have parked the machinery and stopped working. Reason No Money. Now we know schools have not received their money leading to non teaching staff going without salaries. County Governments are crying out and Parliament had electricity disconnected. The JSC has no cash. The list is long.
I have no doubt that the list is long. So, are the affected people doing much, or planning to do anything, or even just talking excitedly about it all?
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Pundit said the economy is growing so spending was not a problem.
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Think of the hospitals. Broken machines. Long lines. Does CORD care enough?
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All energy and money channelled to ICC
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Govt perks to mpigs are finally catching up. GREECE!!!
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Govt perks to mpigs are finally catching up. GREECE!!!
Borrow!!!
http://www.reuters.com/article/2015/10/09/kenya-loans-idUSL8N1292P120151009
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I recall two phases of EXCITEMENT over Kenya's Eurobond thing. ($2 billion, later "tapped" by an additional $0.75 billion.)
Phase One consisted of all the great things that would immediately follow from this expected basket or riches. That included less and less-costly local borrowing by GoK.
Phase Two was based on the success of the offering. This part consisted of people acting as though Kenya had earned the money or got it for free.
Well, it now appears that the money is already gone,
http://www.nation.co.ke/news/Questions-over-use-of-Eurobond-billions-/-/1056/2908230/-/5498j3z/-/index.html
and:
* At the time, GoK's was borrowing locally at below 10%; now it is looking at over twice that.
* Contrary to phase-two excitement, the money has to be repaid, with what amounts to interest.
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With an uncle like this, who cant get rich...
http://www.standardmedia.co.ke/article/2000179265/fresh-details-of-massive-looting-at-the-nys
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Very strange indeed-KNBS are reporting increasing economic activity--which should translate into more taxes.
Maybe the USD denominated loans are taking a toll at treasury; but it would seem it KRA having issues with collecting enough money;
http://www.nation.co.ke/news/Thousands-go-without-pay-amid-cash-crisis/-/1056/2908222/-/ng5kms/-/index.html
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In the 80s, 90s civil servants could go for months without pay because majority had families in the villages where subsistence farming was being practices thus cash was mainly for school fees. Today majority earning more than Kshs. 10,000 live in urban centres with little or no subsistence production back up. What we have are businesses - side hustles- which are substantially unprofitable or padded by the earnings from salaries and bribes.
When in such a situation what can you do? Evidence is in what happened during the teachers' strike. The economic realities mean you can do nothing. The pressure from bills, loans, dependents! Just hope and pray and as the billionaires have advised, be grateful as there are millions of hopeless desperate patriotic Kenyans willing to volunteer (as we stash the billions). My take is that there is not going to be a strike in Kenya by public sector workers for a very long time. What will they do? They will increase appetite for bribes and become more brazen in asking. They will also devote more/all time to their side hustles. We may have to forget any meaningful public goods and services altogether unless Uhuruto are able to instil discipline from the top - signs so far show nobody has moral authority to discipline.
That's a lot of affected people. So what are doing about it? What are they even just saying about it? As long as people meekly take it, they will continually have it socked to them.
I have no doubt that the list is long. So, are the affected people doing much, or planning to do anything, or even just talking excitedly about it all?
It is going to be downward trend till we (whoever we are) find discipline to reset our systems.
There is a comment under this post on understanding systems which points to how long we will be at it
The Big Ching-aso Depending on the crappiness of the players, a game of Monopoly can go on for a long, long, time. Typically the crappier the players the longer the game.
http://www.zerohedge.com/news/guest-post-collapse-our-corrupt-predatory-pathological-financial-system-necessary-and-positive
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However you look at it, the only reason one would pack KRA with tribesmen is to ensure they favor one tribe. Tax Collectors are supposed to be non human treating all taxpayers with equal non humanity. Machines if you like.
In Kenya, we chose a model where we reward tribesmen and expect them to exempt our own people. It simply was never going top work.
I know that after complaints, they tried to bring in other tribes at senior level. But what is not told is the wholesale removal of non Kikuyus at the lower echelons and replacement with Kikuyus. KRA is pure Kikuyu.
Like I said elsewhere show me one State Org run by Kikuyus which is delivering. I could say the same of Luos or Luhyas if there were similar domination. The idea is no institution can be tribalized and expected to deliver. Never!!!
Very strange indeed-KNBS are reporting increasing economic activity--which should translate into more taxes.
Maybe the USD denominated loans are taking a toll at treasury; but it would seem it KRA having issues with collecting enough money;
http://www.nation.co.ke/news/Thousands-go-without-pay-amid-cash-crisis/-/1056/2908222/-/ng5kms/-/index.html
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May be we should return to the Analogue System.
Thousands of workers are yet to receive their September salaries as the government grapples with a cash crisis, which has raised tough questions about the state of fiscal management at the Treasury.
All 47 counties have been affected by the problem, which has also spread to several key institutions and programmes which have been starved of cash due to delays in disbursement of funds from the Treasury.
The Higher Education Loans Board and the free primary and secondary education programmes are among those which have been affected.
Almost two weeks after end month, over 240,000 teachers are yet to receive their salaries, despite a court order that the government makes the payments without further delay.
The crisis was the subject of a meeting between Treasury PS Kamau Thugge and officials of the Kenya Revenue Authority, which has fallen short of its tax collection targets in the first quarter.
THERE IS A PROBLEM
Nairobi County Governor Dr Evans Kidero confirmed that there was a problem which had resulted in the lengthy delay of pay for tens of thousands of workers on the county payrolls.
“Yes, there is a problem and it cuts across all the 47 counties. Up to now we have not paid salaries. We expected to receive the money in the last week of last month but, up to now, the money has not come,” said Dr Kidero.
In Kiambu, county executive for Finance and Economic Planning Ms Mary Nguli issued a circular to all accounting officers and the clerk of the County Assembly on Thursday outlining the problem.
“As some of you may be aware, due to some unavoidable circumstances, the national government has not yet released exchequer’s payment of salaries including other operating expenses,” read the circular which advised the officers to pass the information to all staff and concerned institutions. “Though the delay is a national issue affecting all counties, the county treasury is in constant touch with the relevant institutions to ensure prompt payment of salaries immediately we receive the exchequers.”
Low revenue collection, high interest rates which have depressed borrowing and diminished economic activity and an unfavourable exchange rate have been cited as the reasons the Treasury has run low on finances.
High expenditure on servicing the country’s huge debt obligations is another issue especially after the dollar exchange rate shot up, meaning Kenya is paying more in dollar terms than the initial amount borrowed.
ONLY MCAs PAID
It is understood that in some of the counties which have not paid staff, only MCAs have received their salaries.
The Sunday Nation has established that operations of county governments have equally been affected with procurement and supplies being worst hit.
In Machakos County, about 100 contractors and suppliers have given the county government seven days to pay up the debts owed to them amounting to close to Sh2 billion.
Under their newly-formed Machakos County Contractors and Suppliers Association, the members said they would write a memorandum to Governor Alfred Mutua to demand their payments, some of which they said had accrued since 2013.
Association chairman Barclay Mutinda said the county government should stop any ongoing contracts until all the pending debts to contractors have been settled.
“The delay in payment has led to financial ruin of our members, resulting in loss of property through auctioning, listing at the Credit Reference Bureau, illness and in some cases even stress and death,” said Mr Mutinda.
Governor Mutua is out of the country but a source close to the governor confirmed the concerns, but added that the national government was to blame for the delay in disbursement of funds to the counties.
On Friday, Dr Thugge played down reports of a crisis, blaming bureaucratic delays for the failure to pay MPs and parliamentary staff on time.
He expressed optimism that KRA would step up the rate at which it was collecting tax later in the year.
But many government departments are in the meantime labouring under the problem of delayed disbursement of funds. Teachers are among those worst hit by the crisis.
ACTIVITIES GROUNDED
Delays in payment of teachers affect every village and town in the country because teachers are among the few regularly salaried officials in the counties and failure to pay them has a knock-on effect on local economies.
Development projects have also been affected. In Meru County Government, the Sunday Nation confirmed from sources among the staff that procurement has been put on hold due to the crisis. “A lot of our activities here are grounded. It is a big problem, I can confirm, because currently we are not procuring and suppliers are really on our case. That I can confirm.”
Measures have, however, been put in place in some of the counties to ensure that payments to staff are not affected regardless of the situation.
The Sunday Nation learnt that private arrangements were made with banks in some counties to ensure that salaries are taken care of from other sources, even when there was no money.
Counties, through the Council of Governors, have exerted pressure on the national government to release funds to help them manage their operations.
Siaya Governor Cornel Rasanga said they were yet to receive any money from the national Treasury since the financial year began in June.
“We have been surviving on roll-over funds. The situation means scaling down on development projects while staff are forced to wait longer for salaries,” he said.
CLARIFICATION SOUGHT
Contacted, the Union of Kenya Civil Servants Deputy Secretary-General Jerry Ole Kina said the union was seeking a clarification from the authorities.
He said the union is checking on the counties and will give a full report tomorrow although it also blamed poor management across the board. “It’s a problem with the counties, they were given money and they decided to use it on other things,” he said. “We cannot condemn all of them because some have actually paid their staff.”
The union official said no county should blame the Exchequer for the crisis, arguing that all money for staff payments was released to counties.
“If they talk about the Exchequer, they are not telling the truth because no money is being held by the Exchequer. It is only the money for development that they don’t have,” he said.
It is understood that some counties have been using the development money to pay allowances to staff and MCAs.
While the national government had paid its employees by the fifth day of the month, teachers, who were on strike for most of last month, have not been paid their September salaries. Their Sacco contributions have also not been remitted to their various Saccos since July.
MPs' SALARIES DELAYED
The Sunday Nation also confirmed that even Members of Parliament and parliamentary staff were affected as their September salaries were delayed.
An MP said the delay in parliamentary pay was a source for concern.
“I know our payslips were out a week ago and I received mine. But I am yet to confirm if the money has been wired to the account. Three days ago I confirmed it wasn’t there,” he said.
A member of staff at the National Assembly confirmed that the September salaries for all staff were also delayed and were only paid on Thursday.
Programmes which have been worst affected by the crisis are the free primary and secondary school education, the CDF, rural electricity connection and some commissions.
Council of Governors chairman Peter Munya said counties were finding it hard to cope.
“Most counties have not received the second disbursement from the national treasury,” Mr Munya said.
http://www.nation.co.ke/news/Thousands-go-without-pay-amid-cash-crisis/-/1056/2908222/-/ng5kms/-/index.html
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Many predicted this but they were told to shut up. parliament lights were out, remember?
It's gonna be a while before the train pick up. That is if they stop spending like drunks.
Otherwise..........
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THERE IS A PROBLEM
Nairobi County Governor Dr Evans Kidero confirmed that there was a problem which had resulted in the lengthy delay of pay for tens of thousands of workers on the county payrolls.
Really? I wouldn't have guessed it, so it is good that we now know. :D
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With an uncle like this, who cant get rich...
http://www.standardmedia.co.ke/article/2000179265/fresh-details-of-massive-looting-at-the-nys (http://www.standardmedia.co.ke/article/2000179265/fresh-details-of-massive-looting-at-the-nys)
An extra zero on each transaction could be consistent with a innocent computer error. Has Josy Irungu ever recorded a statement?
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Elsewhere there's plenty to be had:
http://www.nation.co.ke/news/politics/MPs-pocket-billions-in-false-claims/-/1064/2909284/-/8x672c/-/index.html
But some are crying:
http://www.nation.co.ke/news/State-accused-of-failing-to-pay-oil/-/1056/2909272/-/3ra072z/-/index.html
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Gov is slowly and slowly finding itself in a fix with little wriggle room. The development projects can be delayed but salaries, pensions, debts and now county money cannot. Monthly gov pays anything upto 20-30B for salaries,5-10b for pensions,30-40B for debts (both external and local) and counties take about 20-30B.So monthly the gov has to have anything from 75b-110B just to meet consolidated fund demands. And that is just about much KRA collect and that leave GOK in a very tight spot... development projects and other admin expenditures have to depend on deficit funding.
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Though nation are off with the percentage; still 31% drop in diesel demand (KRA already missed 400m in the 2 months and if the oil brokers get the 800m they are asking from KRA that's 1.2b) shows some fundamentals are not adding up -contractors grounded all over the country - seems only NYS brokers are stepping on the gas
In the past two months for instance, demand for diesel has dropped by about 45 per cent, with daily consumption falling from seven million litres to about 4.8 million.
The companies are demanding about Sh800 million already remitted to the Kenya Revenue Authority as Road Maintenance Levy for the period between July 15 and August 2015. During the period, KRA collected Sh3 for every litre of fuel. The companies are supposed to recover their money as a result of one month’s lag on ERC’s price cap announcement and the implementation of the levy.
http://www.nation.co.ke/news/State-accused-of-failing-to-pay-oil/-/1056/2909272/-/3ra072z/-/index.html
who knew in a country with half its population surviving on bare minimum could be all about millions and billions...
the high interest rates for short maturing bonds will make it trickier in coming months... are we that risky given or is just another rent seeking opportunity given our debt GDP ratio?? are we that noncompetitive/unproductive?? IMF?? .... Japan with its 230% debt GDP ratio is enjoying very low interest rates
http://icelandicecon.blogspot.co.ke/2012/01/debt-and-interest-rate-comparison.html
our cost of money could be the highest ... interest rates globally are on a downward trend
http://data.worldbank.org/indicator/FR.INR.RINR
http://www.global-rates.com/interest-rates/central-banks/central-banks.aspx
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Belts are gonna have to be tightened across the board. Lots of discipline needed.
Someone is going to have to lead from the front, no PR BS, and take responsibility for a change.
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Apparently they are borrowing 80B from 3 banks to pay salaries. Things are elephants and nobody want to say so.UhuRuto need to come out and clearly declare we are broke. That is the start of solution. But that would be suicidal. It will remind folks of KANU ERA.Nightmares.