Nipate
Forum => Kenya Discussion => Topic started by: RV Pundit on August 14, 2018, 05:46:24 PM
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The sooner Uhuru tell off IMF the better for Kenya.
https://www.businessdailyafrica.com/news/Uhuru-adviser-hits-out-at-IMF-s-Sh150bn-loan-terms/539546-4711502-t7yxxwz/index.html
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The sooner Uhuru tell off IMF the better for Kenya.
https://www.businessdailyafrica.com/news/Uhuru-adviser-hits-out-at-IMF-s-Sh150bn-loan-terms/539546-4711502-t7yxxwz/index.html
Thugge and Rotich have already agreed to the terms when the standby loan was renewed. Its very simple if the government doesn't like the terms, then they shouldn't take the loan. we'll see how long the shilling can hold up. BTW the diaspora influx is being driven by tax amnesty https://www.taxkenya.com/kenya-tax-amnesty-in-respect-of-foreign-assets-and-income/ so this isn't going to last.
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Hk we never need imf to protect kshs.what is 1.5b dollars in our economy.peanuts.
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The sooner Uhuru tell off IMF the better for Kenya.
https://www.businessdailyafrica.com/news/Uhuru-adviser-hits-out-at-IMF-s-Sh150bn-loan-terms/539546-4711502-t7yxxwz/index.html
Thugge and Rotich have already agreed to the terms when the standby loan was renewed. Its very simple if the government doesn't like the terms, then they shouldn't take the loan. we'll see how long the shilling can hold up. BTW the diaspora influx is being driven by tax amnesty https://www.taxkenya.com/kenya-tax-amnesty-in-respect-of-foreign-assets-and-income/ so this isn't going to last.
iF govt had stopped spending like drunks, we couldn't be in such dire situation. They were told to cut spending 5yrs ago but they said the economy will outgrow it. Time to pay.
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Hk we never need imf to protect kshs.what is 1.5b dollars in our economy.peanuts.
Really? Why then does treasury need a insurance standby loan? Kenya has dollar dominated debt(foreign currency dominated debt) due so a depreciation of kenya shilling would mean costly debt repayments.
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There is a Kshs 6 trillion debt currently outstanding.
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The sooner Uhuru tell off IMF the better for Kenya.
https://www.businessdailyafrica.com/news/Uhuru-adviser-hits-out-at-IMF-s-Sh150bn-loan-terms/539546-4711502-t7yxxwz/index.html
Wow. According to the writer, Uhuru's chap
hits out at IMF’s Sh150bn loan terms ... termed the IMF’s recommendations on Kenya’s economic policies as being out of touch with local reality.
I got lost right there. If I recall correctly, Kenya went to the IMF to ask for this facility and has repeatedly done plenty of begging over it. If now Kenya no longer needs it, then there is no need to hit out or whatever; Kenya can simply write a letter saying "thank you, no longer needed". As far as I can tell, the IMF has no shortage of those that need its money.
As to the statements that Kenya has plenty in its foreign reserves, enough for 6 months of import cover, and what-not, there's this:
* In March this year, Kenya went to the IMF begging for an extension of that facility. In that and an accompanying letter by Rotich and Njoroge (pleading drought, elections, etc.). Kenya promised to do all sorts of things ... and so "please, please extend!". The request and letter are here: https://www.imf.org/~/media/Files/Publications/CR/2018/cr1883.ashx
In March 2018, Kenya had 6 months worth of cover for foreign imports, which is about the same as what it has right now. So if that much cover is enough to not beg now, why was there begging in March? Let's take a closer look at what has actually been said.
* Supposedly even Patrick Njoroge of the CBK has said that we no longer need this money. So there!, the thinking seems to go. Mr. Njoroge is a bright fellow, and I was astonished to read that he had supposedly stated something that "dumb" just a few months after signing the begging letter to the IMF. So I too a closer look. As it turns out, his words were appropriately nuanced, something that was not appreciated by even the journalists reporting on the same.
Here's an example: https://www.nation.co.ke/business/CBK-now-says-shilling-does-not-need-IMF-guarantee/996-4691192-ywj9qc/index.html
The Kenyan economy is well protected against capital outflows and does not need the International Monetary Fund’s (IMF) precautionary credit facility that Kenya could draw in case of distress, Central Bank of Kenya (CBK) Governor Patrick Njoroge says.
That's not quite it. The Nation article then gives us Mr. Njoroge's exact words, and they should be read carefully:
“The IMF is in town and they are reviewing our performance. We are confident in terms of our objectives…but at this point, we don’t need the money from that perspective. We have 5.9 months of import cover. We are pretty comfortable in that sense,” he said.
From that perspective. In that sense. So, is there another perspective? Another sense? Yes:
But speaking at a news conference in Nairobi on Tuesday, following a Monetary Policy Committee interest rate decision on Monday, Dr Njoroge said the facility would be crucial to provide liquidity to the financial system, if necessary.
Crucial. If necessary. As I understand it, that is what the facility is about and has always been about, whence the word "standby". In fact "crucial" and "necessary" are conditions to draw on that facility. It is not about whether it is needed this very minute.
Is $1.5 billion peanuts in an economy of Kenya's size? Many would consider Kenya's economy to be peanut-sized, but we won't get anywhere talking about peanuts in a peanut. Instead, let's reflect om the fact that not too long ago Kenyan had trouble paying a syndicated loan of $0.6 billion and only managed to do so by taking yet another loan (Eurobond). I believe there is a similar, but slightly larger, loan due early next year? How that particular peanut will be repaid is far from clear.
I'd never heard of this Uhuru man who's landing blows on the IMF. So I thought I should take a look at the "presidency's" website and start there, by way of finding out who's doing what and in what ways, and so on and so forth. I stopped at page 1, on the "Big Four": http://www.president.go.ke/
The first thing there is manufacturing. In Kenya that has stagnated for ages at around 10+/-1 % of GDP. But, finally, salvation is at hand. According to the President & His Men, we are about to leap from 9.2% of GDP to 20% of GDP by 2022. No shit. How? We won't ask. That would be nit-picking. Perhaps we can get some comfort form past major projects. In 2013 we heard about the 1-million-acre Galana project that was going to feed Kenyans. And sure enough, there were Kenyans that "ate big" from it ... just not maize, and just not Wanjiku. Laptops? Haven't heard much about that lately, but what do people make of this?:
https://www.standardmedia.co.ke/article/2001267149/school-has-laptops-but-no-desks-and-classrooms-in-west-pokot
and this one
https://www.nation.co.ke/news/Big-hurdles-thwart-Jubilee-s-laptops-plan/1056-4676332-9w2jndz/index.html
and this one: https://www.standardmedia.co.ke/article/2001270444/school-abandons-computer-lessons-as-tablets-remains-unpowered
This is one I really like:
https://www.standardmedia.co.ke/article/2001284304/jubilee-s-school-laptops-sold-to-uganda-plays-music-in-a-busaa-club
But not to worry. A bunch of .pdf files on a bunch of tablet, and the next generation on Kenyan technological revolutionaries are set to go. In fact, Konza City could well have something real by the time they are adults. Plus, there's a "high-level" government body looking at Blockchain.
Never mind. Let's go back to drinking the Kool Aid.
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The consensus is we don't need IMF, their standby loan and their stupidity conditionalities. Kenya in 2018 is not 90s when we had to listen to IMF. What we need is to figure out how to quietly exit the IMF loan without sending wrong signal to the market.
BD - https://www.businessdailyafrica.com/analysis/editorials/Rejecting-IMF-loan-terms-makes-sense/4259378-4712680-nlysvjz/index.html
https://www.businessdailyafrica.com/analysis/ideas/Lenders-push-for-16pc-VAT-on-fuel-irrational/4259414-4712666-ckeh1v/index.html
If I recall nobody really asked IMF for this stand by loan and I doubt if we have ever tapped into it. I know when USD was strengthening against all currency (kshs inclusive) - IMF dolled out this standby facility to many countries and seem it was a trojan horse for those Washington fools to interfere with our fiscal policy.
USD is no longer strengthening and we are happy to have dollar at 100shs to a dollar. Kick the bloody IMF out of Kenya.
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If I recall - it's IMF who came up with this standby facility and extended to many countries including kenya. We don't need it. I doubt we have ever taken the loan anyway. We are just afraid to tell IMF off because it could send the wrong signal to the market - that kenya is "broke" or has failed to meet some IMF fiscal policy. We just need to tell off IMF diplomatically and quietly.
https://www.standardmedia.co.ke/business/article/2001266311/imf-back-up-credit-facility-unnecessary-says-expert
Jeff Gable, chief economist for Barclays Africa, said yesterday the country has sufficient foreign currency reserves to shield itself against unexpected extraneous shocks. “I would say that the reserve position of the Central Bank of Kenya is - even in the absence of the IMF programme - more than comfortable in my mind. So that is not in of itself an issue for the shilling,” said Gable after unveiling the bank’s 2018 Kenya Economic Outlook in Nairobi.
Read more at: https://www.standardmedia.co.ke/business/article/2001266311/imf-back-up-credit-facility-unnecessary-says-expert
The sooner Uhuru tell off IMF the better for Kenya.
https://www.businessdailyafrica.com/news/Uhuru-adviser-hits-out-at-IMF-s-Sh150bn-loan-terms/539546-4711502-t7yxxwz/index.html
Wow. According to the writer, Uhuru's chap
hits out at IMF’s Sh150bn loan terms ... termed the IMF’s recommendations on Kenya’s economic policies as being out of touch with local reality.
I got lost right there. If I recall correctly, Kenya went to the IMF to ask for this facility and has repeatedly done plenty of begging over it. If now Kenya no longer needs it, then there is no need to hit out or whatever; Kenya can simply write a letter saying "thank you, no longer needed". As far as I can tell, the IMF has no shortage of those that need its money.
As to the statements that Kenya has plenty in its foreign reserves, enough for 6 months of import cover, and what-not, there's this:
* In March this year, Kenya went to the IMF begging for an extension of that facility. In that and an accompanying letter by Rotich and Njoroge (pleading drought, elections, etc.). Kenya promised to do all sorts of things ... and so "please, please extend!". The request and letter are here: https://www.imf.org/~/media/Files/Publications/CR/2018/cr1883.ashx
In March 2018, Kenya had 6 months worth of cover for foreign imports, which is about the same as what it has right now. So if that much cover is enough to not beg now, why was there begging in March? Let's take a closer look at what has actually been said.
* Supposedly even Patrick Njoroge of the CBK has said that we no longer need this money. So there!, the thinking seems to go. Mr. Njoroge is a bright fellow, and I was astonished to read that he had supposedly stated something that "dumb" just a few months after signing the begging letter to the IMF. So I too a closer look. As it turns out, his words were appropriately nuanced, something that was not appreciated by even the journalists reporting on the same.
Here's an example: https://www.nation.co.ke/business/CBK-now-says-shilling-does-not-need-IMF-guarantee/996-4691192-ywj9qc/index.html
The Kenyan economy is well protected against capital outflows and does not need the International Monetary Fund’s (IMF) precautionary credit facility that Kenya could draw in case of distress, Central Bank of Kenya (CBK) Governor Patrick Njoroge says.
That's not quite it. The Nation article then gives us Mr. Njoroge's exact words, and they should be read carefully:
“The IMF is in town and they are reviewing our performance. We are confident in terms of our objectives…but at this point, we don’t need the money from that perspective. We have 5.9 months of import cover. We are pretty comfortable in that sense,” he said.
From that perspective. In that sense. So, is there another perspective? Another sense? Yes:
But speaking at a news conference in Nairobi on Tuesday, following a Monetary Policy Committee interest rate decision on Monday, Dr Njoroge said the facility would be crucial to provide liquidity to the financial system, if necessary.
Crucial. If necessary. As I understand it, that is what the facility is about and has always been about, whence the word "standby". In fact "crucial" and "necessary" are conditions to draw on that facility. It is not about whether it is needed this very minute.
Is $1.5 billion peanuts in an economy of Kenya's size? Many would consider Kenya's economy to be peanut-sized, but we won't get anywhere talking about peanuts in a peanut. Instead, let's reflect om the fact that not too long ago Kenyan had trouble paying a syndicated loan of $0.6 billion and only managed to do so by taking yet another loan (Eurobond). I believe there is a similar, but slightly larger, loan due early next year? How that particular peanut will be repaid is far from clear.
I'd never heard of this Uhuru man who's landing blows on the IMF. So I thought I should take a look at the "presidency's" website and start there, by way of finding out who's doing what and in what ways, and so on and so forth. I stopped at page 1, on the "Big Four": http://www.president.go.ke/
The first thing there is manufacturing. In Kenya that has stagnated for ages at around 10+/-1 % of GDP. But, finally, salvation is at hand. According to the President & His Men, we are about to leap from 9.2% of GDP to 20% of GDP by 2022. No shit. How? We won't ask. That would be nit-picking. Perhaps we can get some comfort form past major projects. In 2013 we heard about the 1-million-acre Galana project that was going to feed Kenyans. And sure enough, there were Kenyans that "ate big" from it ... just not maize, and just not Wanjiku. Laptops? Haven't heard much about that lately, but what do people make of this?:
https://www.standardmedia.co.ke/article/2001267149/school-has-laptops-but-no-desks-and-classrooms-in-west-pokot
and this one
https://www.nation.co.ke/news/Big-hurdles-thwart-Jubilee-s-laptops-plan/1056-4676332-9w2jndz/index.html
and this one: https://www.standardmedia.co.ke/article/2001270444/school-abandons-computer-lessons-as-tablets-remains-unpowered
This is one I really like:
https://www.standardmedia.co.ke/article/2001284304/jubilee-s-school-laptops-sold-to-uganda-plays-music-in-a-busaa-club
But not to worry. A bunch of .pdf files on a bunch of tablet, and the next generation on Kenyan technological revolutionaries are set to go. In fact, Konza City could well have something real by the time they are adults. Plus, there's a "high-level" government body looking at Blockchain.
Never mind. Let's go back to drinking the Kool Aid.
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Here you will find Njoroge and Rotich begging for extensions, giving all sorts of excuses and what-not: https://www.imf.org/~/media/Files/Publications/CR/2018/cr1883.ashx
That was just a few months ago, when, as I have noted, Kenya's export cover was no different. Those are the two you need to enlighten with your "facts". I am just an observer here.
As for the Barclays chap, he is entitled to his opinion, but I doubt that he has much say in these matters. At any rate, I have seen little evidence that his opinion matters here, either to the IMF or to Njoroge, Rotich, etc.
Pundit also states that:
If I recall nobody really asked IMF for this stand by loan ...
Well, it looks like your recollection isn't what it used to be. Or do you think the IMF forced it on Kenya?
Here it is: https://www.imf.org/en/Publications/CR/Issues/2016/12/31/Kenya-Request-for-Stand-by-Arrangement-and-an-Arrangement-Under-the-Standby-Credit-Facility-42685
Kenya : Request for Stand-by Arrangement and an Arrangement Under the Standby Credit Facility.
And in the same place you will find all sorts of associated subsequent begging.
... and I doubt if we have ever tapped into it.
That hasn't happened, because the conditions are quite strict. What Njoroge terms "crucial" and "necessary". It is about planning for contingencies, rather than waiting until things go really wrong and then wailing " mzungu, come here quick and help!". Too bad we don't even try to do that with the basics, such as food.
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Back in June IMF had withdrawn the loan facility and treasury didn't reveal that information or outright lied about it https://www.bloomberg.com/news/articles/2018-02-19/kenya-lost-imf-facility-last-year-someone-tell-the-central-bank . This was done to ostensibly protect the shilling. At the time kenya had $7b forex reserve yet desperately needed the insurance. Today forex has increased to $8b due to amnesty. Its not like Kenya has increased its export, or diaspora has increased their incomes. With debt repayments due, kenya can't afford shilling depreciation. A depreciation of 10% would mean increased interest rate of the same. In addition to increased prices of fuel and all other imports. Treasury has already agreed to the conditions, including scrapping of interest rates caps and reduction of deficit. This was done cause the consequences of not having that facility are dire.
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If we ever needed it - it was during 2016 USD global crisis - I doubt we have ever used it - CBK has done a great job defending KSHS. KSHS has been African most stable currency. This standby loan is nice-to-have not a must-have. We DO NOT NEED it. Not with impossible conditions.
Here you will find Njoroge and Rotich begging for extensions, giving all sorts of excuses and what-not: https://www.imf.org/~/media/Files/Publications/CR/2018/cr1883.ashx
That was just a few months ago, when, as I have noted, Kenya's export cover was no different. Those are the two you need to enlighten with your "facts". I am just an observer here.
As for the Barclays chap, he is entitled to his opinion, but I doubt that he has much say in these matters. At any rate, I have seen little evidence that his opinion matters here, either to the IMF or to Njoroge, Rotich, etc.
Pundit also states that:
If I recall nobody really asked IMF for this stand by loan ...
Well, it looks like your recollection isn't what it used to be. Or do you think the IMF forced it on Kenya?
Here it is: https://www.imf.org/en/Publications/CR/Issues/2016/12/31/Kenya-Request-for-Stand-by-Arrangement-and-an-Arrangement-Under-the-Standby-Credit-Facility-42685
Kenya : Request for Stand-by Arrangement and an Arrangement Under the Standby Credit Facility.
And in the same place you will find all sorts of associated subsequent begging.
... and I doubt if we have ever tapped into it.
That hasn't happened, because the conditions are quite strict. What Njoroge terms "crucial" and "necessary". It is about planning for contingencies, rather than waiting until things go really wrong and then wailing " mzungu, come here quick and help!". Too bad we don't even try to do that with the basics, such as food.
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Why are consequence dire when we have nearly 7 months of forex cover? This is nice-to-have and yes because we got it - losing it - would send bad signals to the economy - and as you know that could have huge effect - like during kimunya mess sometime back in Kibaki era. Therefore for me and it seem to be consensus now - we have to wriggle ourselves out of IMF - with as little hue and cry as possible. I am glad everyone that matter seem to agree that IMF have lost the plot here - there is no way parliament will scrap interest cap and there is no way increasing fuel prices to 130shs will be allowed.
Back in June IMF had withdrawn the loan facility and treasury didn't reveal that information or outright lied about it https://www.bloomberg.com/news/articles/2018-02-19/kenya-lost-imf-facility-last-year-someone-tell-the-central-bank . This was done to ostensibly protect the shilling. At the time kenya had $7b forex reserve yet desperately needed the insurance. Today forex has increased to $8b due to amnesty. Its not like Kenya has increased its export, or diaspora has increased their incomes. With debt repayments due, kenya can't afford shilling depreciation. A depreciation of 10% would mean increased interest rate of the same. In addition to increased prices of fuel and all other imports. Treasury has already agreed to the conditions, including scrapping of interest rates caps and reduction of deficit. This was done cause the consequences of not having that facility are dire.
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You are mixing things up.
The loan is like insurance. Just because you haven’t used your medical card for the last one year doesn’t mean that you don’t need one. Kenya badly needs assurance that they would be bailed out if it gets bad. That assurance has conditions which are giving Uhuru nightmares. Why’s that? Because IMF is probably the only cheapest source of such assurances
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We never had this facility until recently and our free floating Kshs has held steady since 1993! Why would we suddenly ran short of forex when Nairobi is a magnet of forex? We only got this facility when USD was on rampage globally and IMF came hawking this product to treasury. We do not need it esp if it mean surrendering the sovereignty of our nation back to IMF. Now IMF is dictating which laws parliament will pass or not. This is pure nonsense. At least Chinese have direct stake...but for an insurer to come and demand that you ammend laws or raise fuel price to 130...it insanity. I think IMF will be told to f. off very soon.
You are mixing things up.
The loan is like insurance. Just because you haven’t used your medical card for the last one year doesn’t mean that you don’t need one. Kenya badly needs assurance that they would be bailed out if it gets bad. That assurance has conditions which are giving Uhuru nightmares. Why’s that? Because IMF is probably the only cheapest source of such assurances
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Pundit if you consider your dismissal of Dr Ndii on the economy - and now his vindication by IMF and many credible experts - you will see your clear and open bias for Jubilee's performance.
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Dr Ndii is a confirmed idiot who plays economics with politics. I am glad NMG kicked him out. IMF history in kenya is replete of huge blunders. This is one of them.They are demanding we buy petrol at 130shs and allow banks to levy 25% interests. And all that so they can give us an overdraft facility in case we ever ran out of forex. Something that last happened in 1993. Right now we are about twice the forex we need to covert our needs.
This has nothing to do with Jubilee. I have quoted Barclays Bank Africa Chief Economist telling kenyan to ignore IMF. Is he also Jubilee? The BusinessDaily Editorial today also tells Jubilee to tell IMF to go f. themselves.
There are probably a few things IMF and WB have got right - I can't recall any - countries in world have grown by disregarding IMF advices. IMF & WB are filled with ivy leagues idiots whose economic trainings are irrelevant to an economy like ours. They are probably relevant in matured economies...but here in Africa, Latin America or Asia..IMF record is nothing but a HUGE DISASTER. You don't need to be an economist to know that 130shs for litre of petrol or removing interest cap is bad bad ideas.
We should study what Asian tigers did, what China is doing and such countries who some went to extend of expelling IMF & WB. Jubilee has been doing well on that front - Western Envoys now know their place...and it about time to tell IMF & WB to fuck off.
Listen to China and Africa Dev Bank. The likes of South Korea grew by doing the opposite of whatever IMF & WB prescribed.
Pundit if you consider your dismissal of Dr Ndii on the economy - and now his vindication by IMF and many credible experts - you will see your clear and open bias for Jubilee's performance.
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I'm wondering about Pundit's legendary flipflops. 1. Did Kenya ask or not ask for the IMF facility? Pundit claims IMF came hawking it. 2. Does Kenya need or not need the IMF extensions? Pundit claims Kenya does not need it because it has never used it. If MPs threw out the sugar report on the basis of Duale Advice, what makes anybody think MPs will not ok the Sh130 fuel hike or the interest rate caps will remain in place? Banks have been circling around the Kenyan customer and they can see MPs ready to descend on the kill.
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If I recall - when Kenya like everyone was facing headwinds on USD -- IMF came hawking their standby facility - and I doubt we have ever used it. CBK does a great job defending our KSHS without IMF help. As for the rest of your nonsense - shove it up.
I'm wondering about Pundit's legendary flipflops. 1. Did Kenya ask or not ask for the IMF facility? Pundit claims IMF came hawking it. 2. Does Kenya need or not need the IMF extensions? Pundit claims Kenya does not need it because it has never used it. If MPs threw out the sugar report on the basis of Duale Advice, what makes anybody think MPs will not ok the Sh130 fuel hike or the interest rate caps will remain in place? Banks have been circling around the Kenyan customer and they can see MPs ready to descend on the kill.
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Pundit will blame the ethnicity of the author, not on the stubbornness of the facts. Who is the hawker and the borrower in this Nation story?
IMF gives Kenya 6-month standby loan extension
THURSDAY MARCH 15 2018
By NEVILLE OTUKI
More by this Author
The International Monetary Fund (IMF) has approved Kenya’s request for a six- month extension of a Sh150 billion ($1.5 billion) standby credit facility that was due to expire Wednesday.
Kenya has in return promised to repeal the law that caps interest rates within the extended six-month window, setting consumers up for a possible steep rise in the cost of loans.
Availability of credit facility is also tied to the Treasury’s fulfilment of the promise it made to cut back on the fiscal deficit through a raft of budget consolidation measures, including cutbacks in public spending.
“On March 12, the executive board of the IMF approved Kenyan authorities’ request for a 6-month extension of the country’s stand-by arrangement to allow additional time to complete the outstanding reviews,” the Fund said in a statement, adding that the reviews are expected to be completed by September 2018.
The IMF said completion of the reviews will enable Kenyan authorities to have access to funds available under the precautionary SBA.
Kenya made a request for extension of the loan to IMF officials who came visiting in Nairobi early this month.
IMF approved the $1.5 billion credit line on March 14, 2016 for a period of 24 months, as precautionary facility that Kenya could draw should the economy be in distress.
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You just latched onto something you never knew before today. Go back to 2016 and see who hawked what. This facility is nice-to-have if we have to deal with exogenous risk (US treasury messing up everyone) but we have not needed it. We have not borrowed the money. IMF hawked this facilty to us and now they are demanding impossible conditions to keep it. Typical IMF. I say we tell them to f.off with their standby facility.
Pundit will blame the ethnicity of the author, not on the stubbornness of the facts. Who is the hawker and the borrower in this Nation story?
IMF gives Kenya 6-month standby loan extension
THURSDAY MARCH 15 2018
By NEVILLE OTUKI
More by this Author
The International Monetary Fund (IMF) has approved Kenya’s request for a six- month extension of a Sh150 billion ($1.5 billion) standby credit facility that was due to expire Wednesday.
Kenya has in return promised to repeal the law that caps interest rates within the extended six-month window, setting consumers up for a possible steep rise in the cost of loans.
Availability of credit facility is also tied to the Treasury’s fulfilment of the promise it made to cut back on the fiscal deficit through a raft of budget consolidation measures, including cutbacks in public spending.
“On March 12, the executive board of the IMF approved Kenyan authorities’ request for a 6-month extension of the country’s stand-by arrangement to allow additional time to complete the outstanding reviews,” the Fund said in a statement, adding that the reviews are expected to be completed by September 2018.
The IMF said completion of the reviews will enable Kenyan authorities to have access to funds available under the precautionary SBA.
Kenya made a request for extension of the loan to IMF officials who came visiting in Nairobi early this month.
IMF approved the $1.5 billion credit line on March 14, 2016 for a period of 24 months, as precautionary facility that Kenya could draw should the economy be in distress.
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Here is some history.
In 2015 - we had some 700M standby facility - we NEVER tapped it - instead we borrowed commercially.
In 2016 - they said we qualifed for double that - we have never tapped
WE DO NOT NEED OR HAVE EVER NEEDED IT. NOW WE HAVE SO MUCH FOREX WE CERTAINLY WON"T BE NEEDING IT.
Let reform our fiscal or monitory or tax policy out of our own needs - not listen to IMF nonsense.
The stand-by is a precautionary facility, intended to be drawn on in the event of a balance-of-payments shock, and will not necessarily be used. Kenya avoided tapping the original, now-expired, facility—by instead securing a US$750m syndicated back loan in October 2015 to covers its financing needs—and may similarly have no need for the new package
http://country.eiu.com/article.aspx?articleid=584030442&Country=Kenya&topic=Economy&subtopic=Forecast&subsubtopic=External+sector&u=1&pid=621583646&oid=621583646
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Seems the amnesty on stolen money which had been stashed abroad is working. When Uhuru friends at State House start speaking cockily, they are likely talking of Eurbond dollars.
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The likes of South Korea grew by doing the opposite of whatever IMF & WB prescribed.
You might want to do a bit more homework on South Korea's economic history and the country's relationships with the IMF and World Bank. In fact, just two decades ago, South Korea was bailed out by the very type of Standby Credit Facility that we are discussing here and had to swallow plenty of bitter medicine from the IMF. The accompanying reforms, many quite deep-reaching, were exactly what the country needed and they have worked.
And the World Bank joined the IMF in pouring down the medicine.
Start here on the homework: http://www.koreanlii.or.kr/w/index.php/IMF_Crisis?ckattempt=1
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Thanks Moon Ki for schooling resident Baghdad bob.....its always refreshing to read inputs from people who have deep insight and understanding of issues.
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Youre talking the period korea was already developed and could entertain imf nonsense.Asian tigers grew in 60s,70s,80s and 90s by doing opposite of nearly every imf recommendation.Imf ideas are relecant to korea now not kenya.Policy experimentation like mpesa is what we need to pursue..not listen to old theories from imf.Imf $ wb are evil institution controlled by usa and eu..they will not allow reforms or change in shareholding..more like the un..and all they do is throw the ladder that us and eu used down.Do the opposite of what they say.If they say open up the market..close it.if they say raise fuel taxes..lower it.if they say remove rate cap..cap it more.economics like any social science is doggy science..you need to experiment and see it what works for you.its not natural science. If certain policy fails in 5yrs..drop it and try something else.Dont listen to imf smart alec who told us to drop social services,fire civil servants and all nonsense.
The likes of South Korea grew by doing the opposite of whatever IMF & WB prescribed.
You might want to do a bit more homework on South Korea's economic history and the country's relationships with the IMF and World Bank. In fact, just two decades ago, South Korea was bailed out by the very type of Standby Credit Facility that we are discussing here and had to swallow plenty of bitter medicine from the IMF. The accompanying reforms, many quite deep-reaching, were exactly what the country needed and they have worked.
And the World Bank joined the IMF in pouring down the medicine.
Start here on the homework: http://www.koreanlii.or.kr/w/index.php/IMF_Crisis?ckattempt=1
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Imf not ngeny fired you from telkoms.They hired leakey to fire civil servants across board to save cost.A moronic idea
Thanks Moon Ki for schooling resident Baghdad bob.....its always refreshing to read inputs from people who have deep insight and understanding of issues.
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Watch your tone...only stated facts
Tells us again how kenya debt/GDP ratio is better than Japan or USA? why we need to borrow more and invest in SGR? Debts have to be paid...upende usipende
Imf not ngeny fired you from telkoms.They hired leakey to fire civil servants across board to save cost.A moronic ideaThanks Moon Ki for schooling resident Baghdad bob.....its always refreshing to read inputs from people who have deep insight and understanding of issues.
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Youre talking the period korea was already developed and could entertain imf nonsense.Asian tigers grew in 60s,70s,80s and 90s by doing opposite of nearly every imf recommendation.Imf ideas are relecant to korea now not kenya.
I was actually living in South Korea at the time, and my recollection of the economic situation at the time and what preceded it are somewhat different from yours. And I had good reason to have a keen understanding of such things: my livelihood depended on it.
I just asked one of my Korean colleagues how he would respond to your statement that "korea was already developed and could entertain imf nonsense". His response was that if you said that to him, and he'd had a few drinks, he'd probably punch you in the face. If that seems like an extreme response, perhaps the following will give you some idea of what happened in the "developed country" that was willing to "entertain IMF nonsense":
IMF 20 Years On: S. Korea’s Never-ending Crisis
...
Before that, the worst financial crisis in South Korea’s history and arguably the most traumatic event since the Korean War.
https://www.koreaexpose.com/imf-economy-south-korea-asian-financial-crisis/
The article is from last year; it is still a sore and painful part of South Korean history. And I can't imagine any Korean who lived through it blithely saying "we got where we are/were by ignoring advice from the IMF and World Bank". In fact, the matter is very much alive right now: Moon, in his first budget referred to the period as "the dark days ... that upended the lives of all Koreans". And he wants to do something about it .... oh, one his pet peeves is the sort of inequality that even Kenya has more of than South Korea.
Of course, it is entirely possible that you have a better understanding of what happened ... how the country's economy developed, what advice should have been taken, etc. etc. etc. But those of us who lived through it, reflected on how things got there and still constantly reflect on that with a view to the future ... well, we take a somewhat different view. Perhaps you, with your expertise on such matters, have some good advice for Moon?
Still, if the path forward for Kenya is to ignore IMF and World Bank "nonsense", then why not. I won't argue with you over that. But I am not the person who needs to hear it; try Rotich, Patrick Njoroge, et al. Maybe they will see your point: why have car insurance, or health insurance, or home insurance, or any kind of insurance if things are just fine. Right?
But even if your "theory" is correct---and the thing to do is to ignore "IMF and World Bank nonsense"---there are other things that matter. Strategy, planning, and, most important [/b] execution[/b]. And leadership.
Kenya could start by having the ability to consistently feed itself without begging; that requires leadership and execution that would do away with jokes like the "Galana 1-million-acres". (To the rest of the world, it seems might peculiar that people who can barely feed themselves should also insist on "we know how .... ") After that, it could then get to the Lego-Land "Silicon Savanah" and that sort of stuff. Speaking of which ... do you know how long it would take---and would have taken even, say, 40 years ago---for South Koreans to put up that sort of thing? .pdf files on tablets as fuel for the next generation of tech-savvy Kenyans! Manufacturing to go from 9.2% of GDP to 22% in just 4 years! Kalongolongo Big 4 time.
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Long diatribe. US just had one of the worst economic crisis recently that had ripple effect globally.US was and is still a developed country. Asian financial crisis affected the asian tigers when they had developed. That sort of "correction" happened after four decades of growth. When did South Korea grow - 60s,70s,80s, 90s and when did the Asian Financial Crisis happened the end of that period. How did South Korea and Asian tigers grow by doing the opposite of whatever IMF & WB was recommending. When they told them to open their markets for competition - they double down protectionism. When they told them to focus on import-substitution - they focused instead on export driven manufacturing. When they told them to cut down on social spending - including for education - they went ahead to increase social spending - like universal schooling and health care. When IMF told them cut debts & public investment in infrastructure - they increase took more debts and financed their infrastructure.
Kenya has been doing the last 15yrs by mostly ignoring IMF. Kibaki ignored IMF and started free primary education. IMF said we couldn't finance it. They don't like us taking more chinese debts - so they gave us a trojan horse in a standby facility - and now they are back - trying to control our economics.Kenya is doing well - like South Korea that grew at 7% in 60-90s - we are consistently now growing at nearly 6% - and we just need to continue public investment to make it 7% and grow it consistently for another 20 years - and we will get where South Korea got - we are investing hugely in social spending, infrastructure and building institutions...and we are seeing poverty dropping from highs of 60s to 30s (%)..
Why has IMF gotten it so wrong so many times yet it hires the best brains? You've got to understand IMF & WB for what they are. US and Western Europe tools. Tools to control and dominate the world post WW2. US and Western Europe refuses reforms at UN, IMF & WB - they refuse to expand shareholding - they refuse to allow injection of new capital - and the smart fellows like China & BRICS have gone ahead to form their own banks. Asia has done their own Asia Dev Bank. Africa has it's Africa Dev Bank which is kicking arse and financing huge projects around.
I say we do not need US puppets with little money telling us shiet. They can take their 1.5B standby dollars and shove it up trump arse. We should not add VAT on fuel or cut back on our spending or remove rate capping just to please IMF.
Youre talking the period korea was already developed and could entertain imf nonsense.Asian tigers grew in 60s,70s,80s and 90s by doing opposite of nearly every imf recommendation.Imf ideas are relecant to korea now not kenya.
I was actually living in South Korea at the time, and my recollection of the economic situation at the time and what preceded it are somewhat different from yours. And I had good reason to have a keen understanding of such things: my livelihood depended on it.
I just asked one of my Korean colleagues how he would respond to your statement that "korea was already developed and could entertain imf nonsense". His response was that if you said that to him, and he'd had a few drinks, he'd probably punch you in the face. If that seems like an extreme response, perhaps the following will give you some idea of what happened in the "developed country" that was willing to "entertain IMF nonsense":
IMF 20 Years On: S. Korea’s Never-ending Crisis
...
Before that, the worst financial crisis in South Korea’s history and arguably the most traumatic event since the Korean War.
https://www.koreaexpose.com/imf-economy-south-korea-asian-financial-crisis/
The article is from last year; it is still a sore and painful part of South Korean history. And I can't imagine any Korean who lived through it blithely saying "we got where we are/were by ignoring advice from the IMF and World Bank". In fact, the matter is very much alive right now: Moon, in his first budget referred to the period as "the dark days ... that upended the lives of all Koreans". And he wants to do something about it .... oh, one his pet peeves is the sort of inequality that even Kenya has more of than South Korea.
Of course, it is entirely possible that you have a better understanding of what happened ... how the country's economy developed, what advice should have been taken, etc. etc. etc. But those of us who lived through it, reflected on how things got there and still constantly reflect on that with a view to the future ... well, we take a somewhat different view. Perhaps you, with your expertise on such matters, have some good advice for Moon?
Still, if the path forward for Kenya is to ignore IMF and World Bank "nonsense", then why not. I won't argue with you over that. But I am not the person who needs to hear it; try Rotich, Patrick Njoroge, et al. Maybe they will see your point: why have car insurance, or health insurance, or home insurance, or any kind of insurance if things are just fine. Right?
But even if your "theory" is correct---and the thing to do is to ignore "IMF and World Bank nonsense"---there are other things that matter. Strategy, planning, and, most important [/b] execution[/b]. And leadership.
Kenya could start by having the ability to consistently feed itself without begging; that requires leadership and execution that would do away with jokes like the "Galana 1-million-acres". (To the rest of the world, it seems might peculiar that people who can barely feed themselves should also insist on "we know how .... ") After that, it could then get to the Lego-Land "Silicon Savanah" and that sort of stuff. Speaking of which ... do you know how long it would take---and would have taken even, say, 40 years ago---for South Koreans to put up that sort of thing? .pdf files on tablets as fuel for the next generation of tech-savvy Kenyans! Manufacturing to go from 9.2% of GDP to 22% in just 4 years! Kalongolongo Big 4 time.
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I know it's Mission Impossible with you, so I will stick to a few words.
Long diatribe. US just had one of the worst economic crisis recently that had ripple effect globally.US was and is still a developed country. Asian financial crisis affected the asian tigers when they had developed.
So? Who said that a crisis, of any sort, can't occur after a country is developed? What I really picked up on at the start was this: "korea was already developed and could entertain imf nonsense". Is it your belief that at the time Korea was "developed" and "could entertain .."? As much as we here respect your expertise, I'll go with the Korean opinions on that one.
Most of what you reproduce is a matter of interpretation by those who want to see things as they wish they were, rather than as they actually are. A little, but not uncommon, story:
Doctor: Slow down there, buddy. You could ruin your health. STDs etc.
Guy: I'm on a roll, Doc. Later for you!
..... <much later> ....
Guy: Doc! Doc! My thing is falling off!
Doctor: No kidding. Well, that was the whole point about the meds and so on.
Pundit: Yes, his dick fell off. And, yes, he is permanently traumatized. But think of how many good fucks he had before that!
When did South Korea grow - 60s,70s,80s, 90s and when did the Asian Financial Crisis happened the end of that period.
I'm unclear as to what you mean by "when did South Korea grow?". Perhaps you could give me your views on its growth before the crisis and after the crisis, by way of specifying the "when"?
How did South Korea and Asian tigers grow by doing the opposite of whatever IMF & WB was recommending. When they told them to open their markets for competition - they double down protectionism. When they told them to focus on import-substitution - they focused instead on export driven manufacturing. When they told them to cut down on social spending - including for education - they went ahead to increase social spending - like universal schooling and health care. When IMF told them cut debts & public investment in infrastructure - they increase took more debts and financed their infrastructure.
You are painting a blanket picture of a whole bunch of advice given to a fairly broad region. As I see it, from the Seoul point of view, some of that advice---whatever it was, should have been taken--and that debate has just been revived. But we need not dwell on that right now. Perhaps we can take it small-small. Home-style. How about we do it one small question at a time?
Small Question #1: Yes, the Asian Tigers have done very well from export-driven manufacturing. So has places like China. My first question is this: how is Kenya doing in any kind of manufacturing, let alone export-driven manufacturing, and what are the prospects for change? Kenya's current grand plan is that manufacturing will be 20% of GDP y 2020? How? No. it won;t do to just say "look over there!. they did x, y, and z in Asia!
We'll proceed once some of these Grand Plans are clear. Ignore the Nasty Outsiders, pick any one of the BIG 4, and tell us about Milk & Honey.
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Treasury benefiting from the interest rates cap. Why should it want otherwise?
Commercial banks say they will continue lending to the government at the expense of businesses and individuals if legislators make good their threat to shoot down the proposed removal of interest caps, bosses of two leading lenders have warned.
https://www.businessdailyafrica.com/corporate/companies/Banks-play-hardball-in-push-against-rate-cap/4003102-4715830-13gkac8z/index.html
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Treasury benefiting from the interest rates cap. Why should it want otherwise?
Commercial banks say they will continue lending to the government at the expense of businesses and individuals if legislators make good their threat to shoot down the proposed removal of interest caps, bosses of two leading lenders have warned.
https://www.businessdailyafrica.com/corporate/companies/Banks-play-hardball-in-push-against-rate-cap/4003102-4715830-13gkac8z/index.html
My theory was that the capping was Jubilee managing their interest expenses by forcing Banks to lend to them dirt cheap.
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Treasury benefiting from the interest rates cap. Why should it want otherwise?
Commercial banks say they will continue lending to the government at the expense of businesses and individuals if legislators make good their threat to shoot down the proposed removal of interest caps, bosses of two leading lenders have warned.
https://www.businessdailyafrica.com/corporate/companies/Banks-play-hardball-in-push-against-rate-cap/4003102-4715830-13gkac8z/index.html
My theory was that the capping was Jubilee managing their interest expenses by forcing Banks to lend to them dirt cheap.
That's the unintended consequences of capping the rates. There are some projections that government rates on Tbills would have already escalated to 20% forcing the government to stop borrowing. So the banks are making easy money from lending to government at the expense of the private sector.
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First we are not in any financial crisis to require IMF intervention. We just need some standby facility although we have twice the forex we need and IMF are using this as an excuse to push really unworkable ideas like cutting deficit, allowing banks free reign and finally adding VAT to fuel. Trust me none of Asian tigers would have accepted these conditions - banks have to be heavily regulated, we cannot talk deficit (small budget) when we should be ambitiously spending, we cannot add make our fuel any more expensive. Therefore in my view this opportunity to tell IMF to go f. themselves.
Now that is done and settled. Let talks of Big 4. In my view the 2 of big 4 are achievable. Universal health care - meaning everyone getting covered by NHIF is the lowest hanging fruit. Housing - building 0.5M cheap housing unit is something chinese can do for us in a yr...we just need to sign along the dotted the lines.
The difficult ones are manufacturing and food security. Kulana despite the best Isreali tech simply doesn't have water needed for irrigation. Kenya generally lies on water deficit region and we will always struggle to feed ourselves....only 20% of kenya is arable..with about 10% being high potential. The food insecurity in ASAL region is going to be hard to tackle...countries like Uganda or TZ have easy task here.
Manufacturing - tough one for everyone - with Chinas's industrial overcapacity - but we can borrow lessons from Ethiopia.
I know it's Mission Impossible with you, so I will stick to a few words.
Long diatribe. US just had one of the worst economic crisis recently that had ripple effect globally.US was and is still a developed country. Asian financial crisis affected the asian tigers when they had developed.
So? Who said that a crisis, of any sort, can't occur after a country is developed? What I really picked up on at the start was this: "korea was already developed and could entertain imf nonsense". Is it your belief that at the time Korea was "developed" and "could entertain .."? As much as we here respect your expertise, I'll go with the Korean opinions on that one.
Most of what you reproduce is a matter of interpretation by those who want to see things as they wish they were, rather than as they actually are. A little, but not uncommon, story:
Doctor: Slow down there, buddy. You could ruin your health. STDs etc.
Guy: I'm on a roll, Doc. Later for you!
..... <much later> ....
Guy: Doc! Doc! My thing is falling off!
Doctor: No kidding. Well, that was the whole point about the meds and so on.
Pundit: Yes, his dick fell off. And, yes, he is permanently traumatized. But think of how many good fucks he had before that!
When did South Korea grow - 60s,70s,80s, 90s and when did the Asian Financial Crisis happened the end of that period.
I'm unclear as to what you mean by "when did South Korea grow?". Perhaps you could give me your views on its growth before the crisis and after the crisis, by way of specifying the "when"?
How did South Korea and Asian tigers grow by doing the opposite of whatever IMF & WB was recommending. When they told them to open their markets for competition - they double down protectionism. When they told them to focus on import-substitution - they focused instead on export driven manufacturing. When they told them to cut down on social spending - including for education - they went ahead to increase social spending - like universal schooling and health care. When IMF told them cut debts & public investment in infrastructure - they increase took more debts and financed their infrastructure.
You are painting a blanket picture of a whole bunch of advice given to a fairly broad region. As I see it, from the Seoul point of view, some of that advice---whatever it was, should have been taken--and that debate has just been revived. But we need not dwell on that right now. Perhaps we can take it small-small. Home-style. How about we do it one small question at a time?
Small Question #1: Yes, the Asian Tigers have done very well from export-driven manufacturing. So has places like China. My first question is this: how is Kenya doing in any kind of manufacturing, let alone export-driven manufacturing, and what are the prospects for change? Kenya's current grand plan is that manufacturing will be 20% of GDP y 2020? How? No. it won;t do to just say "look over there!. they did x, y, and z in Asia!
We'll proceed once some of these Grand Plans are clear. Ignore the Nasty Outsiders, pick any one of the BIG 4, and tell us about Milk & Honey.
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Pundito,
No matter how you try to downplay the facility,we badly need it and that’s why we are getting VAT on fuel.