Nipate
Forum => Kenya Discussion => Topic started by: Higgins the genius on May 30, 2018, 07:58:39 PM
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He claims that though the current debt is sustainable, we cannot afford anyone debts
https://www.the-star.co.ke/news/2018/05/30/we-cant-borrow-even-for-good-projects-cbk-governor_c1765974 (https://www.the-star.co.ke/news/2018/05/30/we-cant-borrow-even-for-good-projects-cbk-governor_c1765974)
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IMF thinks our GDP is 88B dollars - so 4.4 Kshs trillion returns us back to 50% debt to gdp ration - we should borrow until nobody is willing to lend us.
He claims that though the current debt is sustainable, we cannot afford anyone debts
https://www.the-star.co.ke/news/2018/05/30/we-cant-borrow-even-for-good-projects-cbk-governor_c1765974 (https://www.the-star.co.ke/news/2018/05/30/we-cant-borrow-even-for-good-projects-cbk-governor_c1765974)
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You argue like a person who has not gone to school. You can always find someone to lend you cash especially for a country. The question is under what conditions will the lender be ready to lend you. If the CBK governor says Kenya cannot afford to borrow more, who are you to argue otherwise? The governor is being polite to his political lords and in normal circumstances he would have been frank to them and said the country is broke.
IMF thinks our GDP is 88B dollars - so 4.4 Kshs trillion returns us back to 50% debt to gdp ration - we should borrow until nobody is willing to lend us.
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You argue like a person who has not gone to school. You can always find someone to lend you cash especially for a country. The question is under what conditions will the lender be ready to lend you. If the CBK governor says Kenya cannot afford to borrow more, who are you to argue otherwise? The governor is being polite to his political lords and in normal circumstances he would have been frank to them and said the country is broke.
IMF thinks our GDP is 88B dollars - so 4.4 Kshs trillion returns us back to 50% debt to gdp ration - we should borrow until nobody is willing to lend us.
He should concentrate on his day job..borrowing is treasury job.
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Same way you should concentrate on your day job, blogging on Nipate :D
He should concentrate on his day job..borrowing is treasury job.
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And that is what I was doing.
Same way you should concentrate on your day job, blogging on Nipate :D
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When do you ever do any meangiful work..I bet you you job must be boring as fuck..get a new challenge ..if may help remove ruto farts from your brain
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Did you change jobs - last time you were doing graveyard shift as clerk in some hospice - that sucks! Come back to Kenya - this is not the 90s - the economy has been grown at 6% for nearly 2 decades - and people are making real money - there is real transformation.
When do you ever do any meangiful work..I bet you you job must be boring as fuck..get a new challenge ..if may help remove ruto farts from your brain
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What transformation other dairy farmijg, kafee, and tea farming ..then economics ya mawe..dude like I told you when I come there I will be and IAM living the dream...I am now carrying money in sacks. As for you I hate to imagine a savant like yourself doing a shady shitty ngo job.I bet your job invovles projecting how many Kenyans need clitoris reconstruction and they you may be assigned something to do with coming with a model to eliminate dysetnry in kabioango ..what a freaking way to earn money being a scientist for Lords of poverty..uon savant brains at work. Thanks god mlungu gave you an NGO job
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IMF thinks our GDP is 88B dollars - so 4.4 Kshs trillion returns us back to 50% debt to gdp ration - we should borrow until nobody is willing to lend us.
He claims that though the current debt is sustainable, we cannot afford anyone debts
https://www.the-star.co.ke/news/2018/05/30/we-cant-borrow-even-for-good-projects-cbk-governor_c1765974 (https://www.the-star.co.ke/news/2018/05/30/we-cant-borrow-even-for-good-projects-cbk-governor_c1765974)
Borrowing to plug budget deficit brought about by overallocation and inflated budget line items its really imprudent. All that borrowing and supposedly heavy government spending yet we cant't get the economy to grow more than 6%. Government is now the economic driver of kenya economy https://www.businessdailyafrica.com/news/Public-investments-top-economic-growth-driver/539546-4390920-131euivz/index.html purely driven by borrowing yet the corresponding growth from this spending from private sector hasn't and wontmaterialize. So we'll end up with huge debts that the economy can't afford because private sector isn't growing to pay off those debts. So long as the government is spending recklessly and borrowing the interest rates will remain high stifling private sector credit growth. That's a recipe for a stagnant economy, which we're already experiencing.
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Hk..i think our economy would grow at usual 4%..so the extra 2% comes from public investment esp quality chinese n afdb loans which are stringent.I think we can add 2% more if we give most of the budget to chinese to deal with housing deficit.Private sector will sort itself.
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Hk..i think our economy would grow at usual 4%..so the extra 2% comes from public investment esp quality chinese n afdb loans which are stringent.I think we can add 2% more if we give most of the budget to chinese to deal with housing deficit.Private sector will sort itself.
The natural economic growth of kenya is 4% which is about the same with population and inflation rate. Which means naturally the private sector is barely trending water. The reason is the weight of government on the private sector. The housing issue, yes there's housing deficit but why? Its because land prices especially in areas near CBD like bahati,ngara etc are ridiculously high where available and the rest is under the vault of city council. A developer would be hard pressed to make a return on investment where lending rate is 14% at best. The outskirts prices are cheaper but there are no amenities and transport cost is also a big factor.
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I think Land is expensive in Nairobi because getting clean land with title is hard..but now Uhuru has focussed on it...Eastland got 50,000 titles...and more are on the way. That mean those new clean titles...can unlock value...as people can use them as collateral.As regard private sector...I think GOK should focus on it's role...building infrastructure including housing. We have huge housing defiicit. Chinese have an incredible building machine. We can take advantage of it to deliver very cheap housing.
In my view private sector can generate 5% growth yoy - and gov can generate 5% of growth - right now there is some balancing act - I' think something close to 3% each - private sector is suffering because of the credit squeeze - CBK has to find innovative ways to let the banks lend again without high interest - reduce cash ratio - reduce all those NPLS stringest condition - no bank has collapsed the last 20yrs from lending - those that have - did collapse because of bad governance!
Bottomline: private sector is private; let gok focus on public investment. Let private sector become innovative..if gok borrows from eurobond..what stops private sector from borrowing abroad? What stops private sectors from bringing on-board chinese? either as investors or partners or etc?
Private sector seem unable to re-orient from old british colonial structures to the new world where all the action is on China-India-US!! Gov and Public sector have done a far better job.
The natural economic growth of kenya is 4% which is about the same with population and inflation rate. Which means naturally the private sector is barely trending water. The reason is the weight of government on the private sector. The housing issue, yes there's housing deficit but why? Its because land prices especially in areas near CBD like bahati,ngara etc are ridiculously high where available and the rest is under the vault of city council. A developer would be hard pressed to make a return on investment where lending rate is 14% at best. The outskirts prices are cheaper but there are no amenities and transport cost is also a big factor.
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If you are not buikdinf single rooms in the slums like pipeline it is a waste of your funds to invest in real estate in Nairobi..the rat of return without is measely 11 percent to 15 percent for middle class apartments..the costs are too high ..eg you need not less than 3 guards, a cleaner, a caretaker, constant painting as house turnover often, water bills l, electric bills..the investment must be supervised and managed closely, you have agent fees unless you want to spend every waking minutes, delsing with tenants
Kra wants 10 percent..there glut in apartments market..the deficit being talked about only exists in uhuru rectum
Here is world Bank report
The shortage is in single units ..not highroses
https://www.cnbcafrica.com/featured/2017/04/13/kenya-slums/
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(https://www.standardmedia.co.ke/images/tuesday/thumb_hybanvgpatyla2ctg5b161dab587b2.jpg)
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I think Land is expensive in Nairobi because getting clean land with title is hard..but now Uhuru has focussed on it...Eastland got 50,000 titles...and more are on the way. That mean those new clean titles...can unlock value...as people can use them as collateral.As regard private sector...I think GOK should focus on it's role...building infrastructure including housing. We have huge housing defiicit. Chinese have an incredible building machine. We can take advantage of it to deliver very cheap housing.
In my view private sector can generate 5% growth yoy - and gov can generate 5% of growth - right now there is some balancing act - I' think something close to 3% each - private sector is suffering because of the credit squeeze - CBK has to find innovative ways to let the banks lend again without high interest - reduce cash ratio - reduce all those NPLS stringest condition - no bank has collapsed the last 20yrs from lending - those that have - did collapse because of bad governance!
Bottomline: private sector is private; let gok focus on public investment. Let private sector become innovative..if gok borrows from eurobond..what stops private sector from borrowing abroad? What stops private sectors from bringing on-board chinese? either as investors or partners or etc?
Private sector seem unable to re-orient from old british colonial structures to the new world where all the action is on China-India-US!! Gov and Public sector have done a far better job.
The credit growth is being hampered by government overborrowing locally. When Mwiraria was finance minister he got KRA to collect more money not by raising taxes though. This led to low interest rates which lend to credit growth that drove the economic growth of the early kibaki administration. The problem with current administration is hampering private sector growth by budget deficits, overtaxation and borrowing.
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After moi disaster - mwiraria didn't have to do anything - but know we have reached marginal utility in efficiency of KRA - I think problem to me is un-imaginative private sector that has yet to re-orient with new world - China is eating their lunch - and the sooner our private sector learn CHINESE - the better for them.
The credit growth is being hampered by government overborrowing locally. When Mwiraria was finance minister he got KRA to collect more money not by raising taxes though. This led to low interest rates which lend to credit growth that drove the economic growth of the early kibaki administration. The problem with current administration is hampering private sector growth by budget deficits, overtaxation and borrowing.
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After moi disaster - mwiraria didn't have to do anything - but know we have reached marginal utility in efficiency of KRA - I think problem to me is un-imaginative private sector that has yet to re-orient with new world - China is eating their lunch - and the sooner our private sector learn CHINESE - the better for them.
That unimaginative private sector is paying all the taxes for the current government to come up with grandiose projects that yield very little in real economic development. The private sector is shackled with high interest rates and high taxes. BTW how come kenya oil is being transported by road to mombasa instead of railway from Kitale? What's the rush?
Things will get worse before improving. Kibaki build an economic foundation thats been destroyed. Someone has to build it again. Meanwhile ...
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And tax rate has not changed - we are still at mwiraria's 16% VAT - clearly the tax are not enough to meat our ambition- which is why gok is borrowing heavily. I think our private sector should blame themselves...not the public sector that is rolling out roads, railways and other ideas. As regard Early Export - I am not sure about the logistics - but what is needed is heated tankers - our RVR railway remain comatose...I think GOK approached them ..but do they have the capacity to buy those heated tankers...or they are mirred in debt? So yes it better to give it to private logistic company that wants money and can invest in those heated tankers.
That unimaginative private sector is paying all the taxes for the current government to come up with grandiose projects that yield very little in real economic development. The private sector is shackled with high interest rates and high taxes. BTW how come kenya oil is being transported by road to mombasa instead of railway from Kitale? What's the rush?
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After moi disaster - mwiraria didn't have to do anything - but know we have reached marginal utility in efficiency of KRA - I think problem to me is un-imaginative private sector that has yet to re-orient with new world - China is eating their lunch - and the sooner our private sector learn CHINESE - the better for them.
That unimaginative private sector is paying all the taxes for the current government to come up with grandiose projects that yield very little in real economic development. The private sector is shackled with high interest rates and high taxes. BTW how come kenya oil is being transported by road to mombasa instead of railway from Kitale? What's the rush?
Things will get worse before improving. Kibaki build an economic foundation thats been destroyed. Someone has to build it again. Meanwhile ...
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And tax rate has not changed - we are still at mwiraria's 16% VAT - clearly the tax are not enough to meat our ambition- which is why gok is borrowing heavily. I think our private sector should blame themselves...not the public sector that is rolling out roads, railways and other ideas. As regard Early Export - I am not sure about the logistics - but what is needed is heated tankers - our RVR railway remain comatose...I think GOK approached them ..but do they have the capacity to buy those heated tankers...or they are mirred in debt? So yes it better to give it to private logistic company that wants money and can invest in those heated tankers.
VAT rate hasn't changed but the number of VATable goods and services has increased. In addition this year budget proposes vat on fuel to raise 75b annual. Excise duty has gone up and number of charged goods has expanded. Take the VAT on fuel, why do we need it now? Its to finance budget deficit caused by mega projects spending that aren't leading to more economic growth after the initial growth during construction. This projects are addressing perceived future demand not current demand (if you build they'll come mentality), also return on debt of this project is probably negative.
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That fuel VAT is bad idea from IMF - we shouldn't listen to them. Sorry but I think we need many more projects - and these projects should be long term loans - to be paid by future generations that will use them rails or roads. Treasury just need to get off domestic market - and borrow from Chinese & World bank -& ADB - who can dole out long term low interest concessionary loans - we need to take as much low cost high quality loans as the loan market is willing to lend.
VAT rate hasn't changed but the number of VATable goods and services has increased. In addition this year budget proposes vat on fuel to raise 75b annual. Excise duty has gone up and number of charged goods has expanded. Take the VAT on fuel, why do we need it now? Its to finance budget deficit caused by mega projects spending that aren't leading to more economic growth after the initial growth during construction. This projects are addressing perceived future demand not current demand (if you build they'll come mentality), also return on debt of this project is probably negative.
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And tax rate has not changed - we are still at mwiraria's 16% VAT - clearly the tax are not enough to meat our ambition- which is why gok is borrowing heavily. I think our private sector should blame themselves...not the public sector that is rolling out roads, railways and other ideas. As regard Early Export - I am not sure about the logistics - but what is needed is heated tankers - our RVR railway remain comatose...I think GOK approached them ..but do they have the capacity to buy those heated tankers...or they are mirred in debt? So yes it better to give it to private logistic company that wants money and can invest in those heated tankers.
VAT rate hasn't changed but the number of VATable goods and services has increased. In addition this year budget proposes vat on fuel to raise 75b annual. Excise duty has gone up and number of charged goods has expanded. Take the VAT on fuel, why do we need it now? Its to finance budget deficit caused by mega projects spending that aren't leading to more economic growth after the initial growth during construction. This projects are addressing perceived future demand not current demand (if you build they'll come mentality), also return on debt of this project is probably negative.
Has anyone ever thought of reducing the size of govt?
This govt is too big and feeding it requires lots of resources - meaning more taxes.
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Reducing GoK would favour a few rich people - while majority of kenyan will suffer - we need more welfare/social programs - couple with more investment in infra -- we need bigger gov - to have the capacity to deal with insecurity in northern kenya and such other areas.
Some of these ideas about reducing gok - we tried in 90s with leakey - and it backfired - and together with SAP - created more poverty & desperation.
Has anyone ever thought of reducing the size of govt?
This govt is too big and feeding it requires lots of resources - meaning more taxes.