Nipate
Forum => Kenya Discussion => Topic started by: Nefertiti on May 11, 2019, 09:30:20 AM
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Ndii slices and dices it again for the lesser mortals buffled by the #GoKdelivers pie-in-the-sky figures - while they can't afford unga and basics. It's a literal redux of my argument here- - borrow & build is only good when you are rock-bottom like Kibaki/NARC term - after Moi era of westage - and still you must be very frugal, very economical, very efficient. Hii ya Jubilee ni upuzi - when you import everything - capital,labor, technology, materials - it's like living on credit and claiming to be prosperous. If the cylinders are roaring so swell - why are companies making losses? Where are the jobs? What matters is Gross NET Product - what did Kenya actually produce and at what cost?
Real or “Portal” Growth: Why businesses are going bust as the economy roars like an Asian Tiger
Published 4 days ago on May 7, 2019 By David Ndii
(https://www.theeastafricanreview.info/wp-content/uploads/2019/05/Punda-Haiwezi-Kabisa.jpg)
https://www.theeastafricanreview.info/op-eds/2019/05/07/real-or-portal-growth-why-businesses-are-going-bust-and-people-are-struggling-to-make-ends-meet-as-the-numbers-say-the-economy-is-roaring-like-an-asian-tiger/
Kenya is typical of the Africa growth story. This analysis is making a point that I have belaboured over the last five years – that we are squandering money on vanity infrastructure projects of little or no economic value. When the government borrows domestically and invests unproductively, it deprives the private sector of the use of those domestic savings on more productive investments. We also do not produce the capital goods that go into these investments. There is no money that comes into the economy when we borrow from China to build a railway. What we are really doing is taking Chinese goods and services on credit, but as every shopaholic knows, the credit card starts burning a hole in the pocket right away. Asia on the other hand, manufactures its capital goods, hence its infrastructure and other capital investments stimulate and create jobs domestically.
We already know that most of the capital is in public infrastructure with little or no impact on productivity – you need only think of the SGR railway. While the growth accounting analysis shows us the employment contribution, it does not tell us what the expanding workforce is doing. We know that the majority are absorbed in the informal economy where they have little capital to work with, since the government has hogged all the domestic savings, leaving little for the private sector to equip workers with productive capital. While the aggregate data will show that capital per worker is rising, in reality, it is falling since the aggregate figure includes every worker’s slice of the SGR railway, for example. Moreover, we do know that our economies are not creating nearly as many jobs as they should. As the African Development Bank’s (AfDB) most recent Africa Economic Outlook report laments, “the rapid growth achieved in Africa over the last two decades has not been pro-employment”. This is a consequence of the infrastructure-led growth paradigm that this very institution bears most responsibility for promoting.
The economies may be growing, but because unemployment and underemployment are also rising, the incomes of those that are earning are supporting more people. People are not feeling the growth. They are feeling the financial burden of adult children who were expected to be contributing to family upkeep.
Next time you hear them trumpeting five, six, seven per cent GDP growth, you know what to show them.
The comments are telling -
rAjanItjJa • 2 days ago
I would like to point out, that it seems to me GDP makes sense as a metric if our countries are viewed purely as property i.e. production units or commercial assets like farms.
Let me put it differently, when I read your piece Dr. Ndii, GDP looks very viable and consistent as a metric to use if I am sitting on the throne of England and looking at "Kenya" as a farm rather than a "State", and it's natives as serfs rather than "citizens".
Might we be howling in the wind?
afroflame • 3 days ago
Daktari, I would like a clarification. How can you stress that GDP is simply a measure of volume, not value when the ultimate figure is summarized using prices? In fact, it is this price, which can give a misleading picture. Example, a one-product economy, say maize. An economy that produces 100 bags every year for 5 years would be seen to be growing merely if average price for a bag of maize keeps rising year to year. In fact, output could fall, to say 90 bags, but still the economy being reported as growing if prices rise faster. Of course, we would then speak of real GDP but I notice you did not mention it in the context of fluctuating maize prices. Again, I think GDP is a measure of value just as it is a measure of of volume.
bboi • 4 days ago
Thank you for sharing this with us. This short walkthrough is eye-opening for those of us not tutored in the economics of what is actually going on and are being misled by the #GoKDelivers portal numbers. Hopefully, people take their time to read your content instead of pointlessly @'ing you on Twitter.
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The usual nonsense from NASA economist. Please if you find someone else like his former prof Paul Colier at Oxford or someone at least objective kindly alert us.
Otherwise, this goes directly to the dustbin named Dr Ndii.
Which business are going bust - when Safaricom is about to become a billion dollar gross profit a year company?.They just made gross profit of 900M dollars. Their revenues are already at 2.5B dollars.
When banks last year made a record 150B kshs profit - banks assets have more than tripled under Jubilee.
When new sectors like digital lending - are nearly overtaking bank loans? Mshwari alone have lend 2.3B dollars..there are 50 such micro-lending.
Safaricom's Fuliza (overdraft) are already nearly crossing 1B dollars - few months since it was launched.
Tech companies alone attracted nearly half a billion dollars last year in FDI.
Exports through AGOA rose to 700M - from usual 400M - a 25% annual increment.
Exports of tea, macademia, avacados and such - increased significantly last year.
Tourism is finally recovered and is back on the growth trajectory - visitors and earning grew by another 25% if I am not wrong.
Diaspora are sending more and more dollars home....
Are those infrastructure?
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Of course he has the NASA touch but he has a point. It's mostly the financial sector that has a fake boom - as consumerism fuels the exorbitant Fuliza or M-Shwari. Mobile loans are not a viable or sustainable capital - it more like theft - 90% interest. Fuliza is shylock business. Actually it worse.
Pundit if these were billions minted from genuine reasonable interest on lending I would agree there's growth. Say like Sacco 12% p.a. As it is now it's just karata on gullible Kenyans.
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This is the new economy - new digital economy - interest rates will come down eventually with better data and more competition - but definitely fact is billions of dollars are now available to kenyans at the touch of a button. These loans people are willing to pay high interest - because it serves a huge needs - instead of pawning your TV or Cooker or goat or calling 10 relatives like it used to happen - you can just fuliza or mshwari - get emergency loans in few minutes.Equity are now dispensing 90% of all loans digitally - they are now dumping t-bills (lending to gov) - for SME - because they it much cheaper to do that - with their tech infrastructure.
Don't get me started on betting - that is another sector of the economy that is growing very fast - I hope Ruto with his Christianity doesn't stymie it - because we know economies such as Las Vegas or Macau China are built on top of that. Treasury is getting alot of billions dollars from betting companies - pretty much make up for companies struggling in other sectors.
We are in the midst of a new revolution - powered by M-pesa. It not only in finance - but all sectors - agriculture even - look at Safaricom's digifarm - it piloting in Meru - simple USSD app - that gives farm input vouchers - look at Twiga Foods - they haven't scaled yet - but they are using technology including M-pesa to solve market access - Look at Unilver's Duka lending - they use m-pesa to lend shops/dukas goods - which they repay daily.
Look at all the digital taxis - probably about 10,000 new decent jobs have been credited - complete with credit and behavioral data - that can help these people access loans, health insurances and name it.
I mean we already knows bodas bodas derided as they are ; already created so many jobs, eased transportation in rural and urban areas - and has made life easier.
All these reflect in the economy.
I tell you Kenya is in a cusp of a big revolution.
Of course he has the NASA touch but he has a point. It's mostly the financial sector that has a fake boom - as consumerism fuels the exorbitant Fuliza or M-Shwari. Mobile loans are not a viable or sustainable capital - it more like theft - 90% interest. Fuliza is shylock business.
Pundit if these were billions minted from genuine reasonable interest on lending I would agree there's growth. Say like Sacco 12% p.a. As it is now it's just karata on gullible Kenyans.
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I agree technology is a big leverage - that has disrupted industries. Say a young man now doesn't to own expensive matatu to get a piece of the transport pie. But Safaricom or Equity's billions are not indicative of growth - because they are exorbitant. It shows consumerism from ease of access to cash.
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See how Pundit struggles to finger any genuine growth outside the M-Pesa ecosystem.
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There is a lot of growth outside m-Pesa & related tech (a confluence of finance & intermediation with telecommunication) - infrastructure expansion is greater than ever - we are building more roads, rails, ports, power lines, power stations than ever.
we are doing great in real estate - we are building more houses, malls, hotels, offices, and institutions than ever before!
Devolution is also helping drive gov expenditure (compared to national gov that generally get hobbled by judicial disputes - see Big 4 housing agenda now - the year has ended and judiciary has blocked deduction) - we see counties all over doing great stuff - from Turkana to Mandera to Makueni - there is some huge visible progress.
The economy has also generally benefitted from very low oil prices - I mean Kibaki regime pretty much had to contend with oil at 140 dollars a barrel - now we have been enjoying about half that.
We are seeing a rebound in the tourism sector - now firmly at 2M tourists - and the sector is looking up.
Agriculture the mainstay of the economy isn't doing badly either - horticulture (33% annual growth that Ndii ignored) is now easily approaching 2B dollars a year - as well as tea - and the dairy sector continues to see double-digit growth. We have issues with maize, sugar-cane, and coffee - that Ndii uses to drive his NASA point - but generally, the agricultural sector is doing great.
Manufacturing has generally kept pace with economy - at around 10% - with agro-processing not doing badly - EPZ are also not doing badly - yes a lot needs to be done - to get this sector to grow to 15% of GDP in the medium term - and at least 20% of the GDP in the long term - including lowering electricity cost - and sorting out teething problem at SGR.
Within the social sector - we continue to make a huge investment in the education sector (both at individual and gov level), we are seeing sustained population decline (demographic dividends will start to kick in soon nationwide), we are seeing more health care investment - HIV, Malaria a& TB pretty much under control & people are living longer. Generally, the quality of life in Kenya is improving. Poverty has gone down 10% the last decade - and I believe with devolution - we see even greater dent against poverty in the ASAL regions - Turkana, Manderas, Wajirs.
Despite corruption and red tape - Jubilee are nailing the ease of doing business - from being ranked around 120 to now 61 (always in the most improved) - only 3 African countries have better ease of doing business than Kenya now - Rwanda, Mauritius and I think Morocco. Jubilee are targetting position 50(corruption notwithstanding). This Gov has achieved it by leveraging technology - digitizing gov services, all the huduma centers, and namely everything has become more transparent and accountable - thanks to stuff like E-Citizen.
See how Pundit struggles to finger any genuine growth outside the M-Pesa ecosystem.
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This is the hard infrastructure debt-led "growth" contended by myself, Ndii and other experts. At 90% import of everything - capital, labor, technology, materials - it's unsustainable - living on credit and thinking you're rich is delusional. Rotich is merely flipping bonds - like McDonald's buggers :) - as debtor after debtor come calling. Next thing Kenya will be demoted in credit rating.
There is a lot of growth outside m-Pesa & related tech (a confluence of finance & intermediation with telecommunication) - infrastructure expansion is greater than ever - we are building more roads, rails, ports, power lines, power stations than ever.
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Are we really doing "well"? Real estate is going bust - Two-Re I went there 2017 and beyond 1st floor it was empty. Haunted hallways - the construction boom is not efficient - just like SGR - cause they are expensive without sufficient demand. It's worse at Upper Hill - with all the corporate HQs concentrated there. So as the trucks continue to haul cargo along the roads - giving the SGR a wide berth - so do the tenants in Nairobi and other places. Most last-mile connections are yet to flip the switch on. Hard infrastructure must be pared with utility - we can forgive GoK whose incompetence we are accustomed to - but these Centums, Britams and private investors are quite buffling - with such poor choices. Centum posted reduced margins - with profit warnings - Britam made BILLIONS in losses - despite all the technology, integration, optimizations and what not. Their "IT transformation" - or some crap like it - was all over the media a year or so ago - as they continue to hawk antiques - motor or life insurance to millennials. :) You asked what companies were going bust? KQ is another one - minting BILLIONS in losses year after year - despite going digital and poaching MJ on board - Mr M-Pesa himself.
we are doing great in real estate - we are building more houses, malls, hotels, offices, and institutions than ever before!
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Manufacturing needs 3 or 4 big inputs - which Jubilee and even Kibaki have not nailed.
Transport - SGR is more costly than roads so nothing there. Most goods are still on the trucks.
Labor - with all the unions - new Katiba rights, Labor court - there is very little GoK can do to beat China, Vietnam, Bangladesh or Ethiopia. Jubilee has zero strategy here.
Power - this remains more costly per kWh than before all the last-miles. It's about COST - not just new power plants or transformers.
So for manufacturing zero. Hakuna kitu. Big 4 pillar is just hollow with no discernible strategy - what is Uhuru doing that Kibaki did not do? Ease of doing business is a buzzword like GDP - where are the new investors or FDI - from the index 130-to-60 achievement?
Manufacturing has generally kept pace with economy - at around 10% - with agro-processing not doing badly - EPZ are also not doing badly - yes a lot needs to be done - to get this sector to grow to 15% of GDP in the medium term - and at least 20% of the GDP in the long term - including lowering electricity cost - and sorting out teething problem at SGR.
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Sema horticulture - flowers - which sell for a dime a dozen. Then come back 100X as perfume. :) Can you really see any "growth" worth praise? Until you have value-added processing - of simple fragrances or insecticide - I don't see meaningful growth.
Milk farmers are crying as Uganda floods the shelves. Sugar, maize, coffee - these deadwood sectors - what has Jubilee done about them? 8)
Nope, agric has not performed anything of note. Just waiting for God's rain - as drought and the ASAL spreads.
Agriculture the mainstay of the economy isn't doing badly either - horticulture (33% annual growth that Ndii ignored) is now easily approaching 2B dollars a year - as well as tea - and the dairy sector continues to see double-digit growth. We have issues with maize, sugar-cane, and coffee - that Ndii uses to drive his NASA point - but generally, the agricultural sector is doing great.
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You're inventing your facts.
Kenya growth is broad-based. From all sectors.
We don't import 90% of everything. We import about 18-20B worth of goods - about 20% of GDP - mostly consisting of machinery & equipment (20%), Vehicles (10%),iron & steel (10%),petroleum and related products(10%) - the rest of our imports are cereals,plastics, pharmaceuticals & paper.We don't import labour of course - we have less than 10K expats - we export labour and earn remittance (about 2.5-3B now)- and we would love to import capital(FDI).
Our trade deficit is a concern but Kshs has been strong because of in-flows (we have now about 8B forex reserves - about 5.5month cover when we only need 4 months. We are seeing reduce export to regions (EAC) - and we need to get Africa Free Trade - & new regions like Ethiopia & Somalia - to compensate for Ug & TZ who are doing good in import-substitution wise.
Our debt/gdp ratio is approaching the limit (nearly 60%) but we are far from debt crisis; debt refinancing happens everywhere every day including in US or China gov. We are taking steps - and we are seeing a narrowing of fiscal deficit (we are not borrowing more than we should which explain we refused to take the China loan).
Kenya macro-economics couldn't be any greater. The economic growth rate of 6.3%. Inflation of 4% is great. The interest rate in single digit (at most 13%). Narrowing fiscal deficit and taxes/gov revenues have tripled the last 10yrs. Trade deficit -exports are rising but yes imports are huge concerns.
Overally Kenya needs to continue investing in huge infrastructure - but avoid take a lot of debts - and think about public-private investment (like it has been done on power sector) - and think about re-cycling it's assets like Safaricom into Infrastructure.
This is the hard infrastructure debt-led "growth" contended by myself, Ndii and other experts. At 90% import of everything - capital, labor, technology, materials - it's unsustainable - living on credit and thinking you're rich is delusional. Rotich is merely flipping bonds - like McDonald's buggers :) - as debtor after debtor come calling. Next thing Kenya will be demoted in credit rating.
There is a lot of growth outside m-Pesa & related tech (a confluence of finance & intermediation with telecommunication) - infrastructure expansion is greater than ever - we are building more roads, rails, ports, power lines, power stations than ever.
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I wish you could quote real empirical evidence beyond your own anecdotal stories walking around malls and upper hill. We have [Hass, Cytons and Knight Frank with good real estate data. I don't recall reading anything alarming from them lately.
Maybe you should start from Hass Index
http://hassconsult.co.ke/real-estate/hass-index
http://hassconsult.co.ke/images/Q12019Residential.pdf
I think you're confusing the oversupply in certain sectors of real estate sectors - esp in the upper end - with real estate sector. The bottom has not been scratched. This is where Uhuru's Big 4 housing comes in. Already we have some 25B dollars worth of commitments in the lower sector - I am talking low and lower-middle class housing (1-3M worth of housing).
Real estate has kind of cooled off (cement sales are leveled out) because of credit freeze thanks to interest capping and of course, everyone is waiting for Uhuru big 4 housing to start. The judiciary has not helped things - Jubilee had projected to raise 70B from taxes - and kick start this. Uhuru has to bring the hammer down on Judiciary or nothing gets done here.
Uhuru estimates in 5yrs - real estate will double - from 7% of GDP to something close to 15% - as Chinese investors come to town and build huge cheap houses - to fill the gap in low end of the market. We don't need have slums when Chinese can deliver very cheap social housing. We need to reign on informal housing sector where folks are building unsafe and inhabitable buildings in Eastlands & all over....instead of big chinese contractors like Edermann seizing the market and gifting the economy with economies of scale needed to deliver affordable and safe houses.
Often ignored part of the China economic model - is that construction for long time made 50% of China GDP - kenya needs to make sure construction (real estate and related) - moves from less 10% to 30% - young generations should not be doing farming - they should be in mjengo - build houses, doing electrical wiring, plumbing, painting and all the many jobs - we have so many slums - people are squeezing in really tiny houses - and we have fintech, china construction machine and the money - to borrow from china.
Are we really doing "well"? Real estate is going bust - Two-Re I went there 2017 and beyond 1st floor it was empty. Haunted hallways - the construction boom is not efficient - just like SGR - cause they are expensive without sufficient demand. It's worse at Upper Hill - with all the corporate HQs concentrated there. So as the trucks continue to haul cargo along the roads - giving the SGR a wide berth - so do the tenants in Nairobi and other places. Most last-mile connections are yet to flip the switch on. Hard infrastructure must be pared with utility - we can forgive GoK whose incompetence we are accustomed to - but these Centums, Britams and private investors are quite buffling - with such poor choices. Centum posted reduced margins - with profit warnings - Britam made BILLIONS in losses - despite all the technology, integration, optimizations and what not. Their "IT transformation" - or some crap like it - was all over the media a year or so ago - as they continue to hawk antiques - motor or life insurance to millennials. :) You asked what companies were going bust? KQ is another one - minting BILLIONS in losses year after year - despite going digital and poaching MJ on board - Mr M-Pesa himself.
we are doing great in real estate - we are building more houses, malls, hotels, offices, and institutions than ever before!
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Yes Manufacturing is the toughest - but SGR is the start - esp if we build SEZs around it. SGR will become cheaper once we used it for it's purpose - to transport bulk non-containerized goods - I am talking clinker, iron & steel, cereals, such - and we now have excess electricity - that needs to be sold for cheap for industries.
Labor cost is acceptable if we improve worker productivity - and this where TIVET comes in - where companies are getting workforce with the right skills- therefore Jubilee huge investment in TIVET instead of universities - will mean companies can literally locate anyway - and get workforce who knows how to operate say CTC machine.
Manufacturing needs 3 or 4 big inputs - which Jubilee and even Kibaki have not nailed.
Transport - SGR is more costly than roads so nothing there. Most goods are still on the trucks.
Labor - with all the unions - new Katiba rights, Labor court - there is very little GoK can do to beat China, Vietnam, Bangladesh or Ethiopia. Jubilee has zero strategy here.
Power - this remains more costly per kWh than before all the last-miles. It's about COST - not just new power plants or transformers.
So for manufacturing zero. Hakuna kitu. Big 4 pillar is just hollow with no discernible strategy - what is Uhuru doing that Kibaki did not do? Ease of doing business is a buzzword like GDP - where are the new investors or FDI - from the index 130-to-60 achievement?
Manufacturing has generally kept pace with economy - at around 10% - with agro-processing not doing badly - EPZ are also not doing badly - yes a lot needs to be done - to get this sector to grow to 15% of GDP in the medium term - and at least 20% of the GDP in the long term - including lowering electricity cost - and sorting out teething problem at SGR.
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We are transitioning from low-value crops (Uganda & TZ can have them) into high-value crops (horticulture, dairy & etc) - and then when Ruto become PORK - we will move the value chain - by enforcing value-addition. But first we have to discourage the planting of small-holder planting of maize, beans and such nonsense - by bitting the bullet - and allowing those products to be imported duty free - and have Galanas doing large scale planting of them - and then force our farmers to engage in high-value crops - and for those sectors that are already mature (like Tea) -force them to do value-addition - like we did for Macadamia. No Kenya tea should be sold in bulk. Sri Lanka did this - and they earn twice from their tea. We can double our tea earnings by simpling - decreeing they be packed and branded in Mombasa before shipping.
Sema horticulture - flowers - which sell for a dime a dozen. Then come back 100X as perfume. :) Can you really see any "growth" worth praise? Until you have value-added processing - of simple fragrances or insecticide - I don't see meaningful growth.
Milk farmers are crying as Uganda floods the shelves. Sugar, maize, coffee - these deadwood sectors - what has Jubilee done about them? 8)
Nope, agric has not performed anything of note. Just waiting for God's rain - as drought and the ASAL spreads.
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(https://www.standardmedia.co.ke/images/sunday/2019_05_12_paper.png)
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That is uhuru-wanjigi tiff - they need to sort it out. Uhuru acted in anger after Wanjigi refused to budge in SGR deal...so he went ahead and cancelled Wanjigi-Raila-NARA-Chinese contract. I think kenya should enter into negotiated talk with Chinese and give them the deal.
We have to be careful with the so-called graft fight when dealing with INTERNATIONAL contracts - if we mishandled the Italians - we could end up paying a lot of billions of dollars. Probably good reason to let DCI handle what they can chew.
We already paid some of the anglo-leasing deals because of put pen-to-paper. Raila and Wajingi already ate their down-payments and are probably with Chinese in asking for 22B kshs.
(https://www.standardmedia.co.ke/images/sunday/2019_05_12_paper.png)
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China has denied Kenya loan - Uhuru and Raila went all the way there - Kenya did not "refuse" to take the loan.
90% import - of inputs in hard infrastructure - which explains why many are asking where are the jobs from the 6.3% growth? Imported capital - DEBT not FDI lol - labor, technology and materials. Literally when you say 5B SGR - that is solid income to China - not a single drop in Kenya- except maybe the kickbacks. It's why we are "inefficient" - can't build nothing for ourselves. Most other fast leapfrog countries - do their own infra - own capital, expertise, technology, materials- which is why they have minimal debt despite the rapid growth. No local enterprises have materialized as solid employers or taxpayers due to SGR - so no new incomes - yet we have massive debt per head.
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Pundit if this was private sector-led growth - there would be lots of new jobs, supply chains - new incomes and taxes - what you call sustainable growth. There would be no massive foreign debt - in fact debt would be minimal - private enterprise is much more efficient than GoK any day.
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Where is the evidence China refused to lend us a loan? As far as I could glean we didn't agree on the loan terms - China wanted a collatoral put-down. Imported capital - yes we are taking in debt - but also attracting a lot of FDI - esp around Fintech.
Poor SGR!. We have debated you to death - it is doing very well at operation level- as it did during the construction phase - it's operation is off to a great start. It lifting many boats - from Mombasa ports, Shipping companies are now happily docking in Mombasa knowing the port is super-efficient and using it for transshipment to small ports around, to passengers enjoying their ride every day and tonnes of cargo being transported. I am not sure what more you need to see - Kiosk around SGR or Stations? Industrials SEZ will come - now that focus has shifted from construction to operations. Definitely it has made transport more competitive because truck owners have to compete with SGR.
People are talking about "feeling" the 6.3% growth or lack of jobs - but where is the evidence? where is the empirical data from our labour market that shows they are no new jobs being created. This what the likes of Ndii should be using their PHD and donor connection to come up with such data...like they did with the Corruption Perception Index(CPI).
We need to become a country that argue based on DATA/EVIDENCE. Not just parroting like you're doing here - just unhelpful rant.
China has denied Kenya loan - Uhuru and Raila went all the way there - Kenya did not "refuse" to take the loan.
90% import - of inputs in hard infrastructure - which explains why many are asking where are the jobs from the 6.3% growth? Imported capital - DEBT not FDI lol - labor, technology and materials. Literally when you say 5B SGR - that is solid income to China - not a single drop in Kenya- except maybe the kickbacks. It's why we are "inefficient" - can't build nothing for ourselves. Most other fast leapfrog countries - do their own infra - own capital, expertise, technology, materials- which is why they have minimal debt despite the rapid growth. No local enterprises have materialized as solid employers or taxpayers due to SGR - so no new incomes - yet we have massive debt per head.
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I listed new 'sectors" that are private sector driven - previously - mostly around Fintech, tech and related. The private sector struggling are the ones that are being disrupted. The agile ones like Equity who saw the disruption - and boarded the train - are reaping profit. So yes a few old dead wood in private sector are bleeding (see NSE listed stocks) - because Kenya is in a cusp of a revolution powered by M-pesa like US was in 1990s powered by Internet & Computers. Like in the US - and worldwide - computers initially led to retrenchment - but the efficiency and productivity gains - grew the economy so fast - eventually new jobs emerged as new industries replaced the old ones.
If you don't have a tech or at least fin-tech strategy in Kenya now - and don't make mobile payments(M-PESA) the center of your strategy - then chances are whatever sector you're - you're going down very fast.
Look at Insurance sectors - they are bleeding - because you still have to go some office or agent to buy insurance with cash? They have no digital strategy. You should be able to buy third-party insurance from your phone, print an insurance cover and have it authenticated via USSD - if need be.
New players like SportPesa, the Jambopays, Cellulant, Twiga, Uber, Little Cab, Jumias - name them - are going to eat your lunch eventually. The Safaricoms & Equitys probably already ate your breakfast.
Pundit if this was private sector-led growth - there would be lots of new jobs, supply chains - new incomes and taxes - what you call sustainable growth. There would be no massive foreign debt - in fact debt would be minimal - private enterprise is much more efficient than GoK any day.
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Don't conflate your dreams with reality. Centum and Britam have lost big - BILLIONS - in real estate - "asset management" - as new malls remain ghost towns. The lower class housing - this remains a pipedream - slums have existed and expanded rapidly since independence. This "sector" is dominated by smalltime landlords and slumlords - who are corrupt as hell - very chaotic sector. Is this what you're saying has grown? We are debating what has been done - not visions - when the Chinese build large scale cheap housing it will be all over the news. How would they do that when slum dwellers are dirt-poor with no 1K for rent? More debt? It's why you need private sector-led growth - not hard infra which noone uses - new incomes means new paying tenants.
I wish you could quote real empirical evidence beyond your own anecdotal stories walking around malls and upper hill. We have [Hass, Cytons and Knight Frank with good real estate data. I don't recall reading anything alarming from them lately.
Maybe you should start from Hass Index
http://hassconsult.co.ke/real-estate/hass-index
http://hassconsult.co.ke/images/Q12019Residential.pdf
I think you're confusing the oversupply in certain sectors of real estate sectors - esp in the upper end - with real estate sector. The bottom has not been scratched. This is where Uhuru's Big 4 housing comes in. Already we have some 25B dollars worth of commitments in the lower sector - I am talking low and lower-middle class housing (1-3M worth of housing).
Real estate has kind of cooled off (cement sales are leveled out) because of credit freeze thanks to interest capping and of course, everyone is waiting for Uhuru big 4 housing to start. The judiciary has not helped things - Jubilee had projected to raise 70B from taxes - and kick start this. Uhuru has to bring the hammer down on Judiciary or nothing gets done here.
Uhuru estimates in 5yrs - real estate will double - from 7% of GDP to something close to 15% - as Chinese investors come to town and build huge cheap houses - to fill the gap in low end of the market. We don't need have slums when Chinese can deliver very cheap social housing. We need to reign on informal housing sector where folks are building unsafe and inhabitable buildings in Eastlands & all over....instead of big chinese contractors like Edermann seizing the market and gifting the economy with economies of scale needed to deliver affordable and safe houses.
Often ignored part of the China economic model - is that construction for long time made 50% of China GDP - kenya needs to make sure construction (real estate and related) - moves from less 10% to 30% - young generations should not be doing farming - they should be in mjengo - build houses, doing electrical wiring, plumbing, painting and all the many jobs - we have so many slums - people are squeezing in really tiny houses - and we have fintech, china construction machine and the money - to borrow from china.
Are we really doing "well"? Real estate is going bust - Two-Re I went there 2017 and beyond 1st floor it was empty. Haunted hallways - the construction boom is not efficient - just like SGR - cause they are expensive without sufficient demand. It's worse at Upper Hill - with all the corporate HQs concentrated there. So as the trucks continue to haul cargo along the roads - giving the SGR a wide berth - so do the tenants in Nairobi and other places. Most last-mile connections are yet to flip the switch on. Hard infrastructure must be pared with utility - we can forgive GoK whose incompetence we are accustomed to - but these Centums, Britams and private investors are quite buffling - with such poor choices. Centum posted reduced margins - with profit warnings - Britam made BILLIONS in losses - despite all the technology, integration, optimizations and what not. Their "IT transformation" - or some crap like it - was all over the media a year or so ago - as they continue to hawk antiques - motor or life insurance to millennials. :) You asked what companies were going bust? KQ is another one - minting BILLIONS in losses year after year - despite going digital and poaching MJ on board - Mr M-Pesa himself.
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You're shooting in the dark as always using purely "common senses" to judge complex stuff. You should try to read that Hass report, find Cyton and Knight Frank. If you do not trust KNBS real estate data. Our real estate is very tiny just like our economy. The people struggling are those who made huge bets on the upper-end of the markets - there is an oversupply and there is reduced effective demand. The people who are dealing with lower-end of market - like Ederrman's GreatWall are making money. Edderman are building twenty-three (23) 34 floors apartments - 8 in Ngara - and 15 in Ngong roads - and they are closing sales - because they are selling units for 3M kshs.
(http://erdemann.co.ke/property/cache/mod_bt_property/15/1548056051-BACKDROP.jpg)
There is a huge effective demand in that segment. Many Kenyans can easily afford a 2-3M mortgage house - it about how much they pay rent. Landlords - are in the informal market - Uhuru just need to sort the land - give gov land for free - to developers - and developers will build house for 3m - and everyone will happily buy them.
As for Britam and the likes - they need to stop building malls and high-end office spaces - and start building 1-3m houses. With 10B - that they use to build skyscrapers - they can build even 10,000 units of cheap housing estates - and sell them easily - and make tonnes of money.
There is time for everything as bible says. There was a time when investing in universities made sense - now it doesn't with a cap of 70,000 students eligible annually - all absorbed by JAB(or whatever it call now). Now it's time to invest in TIVET and middle-level colleges - with all the Matangi's Es, Ds and Cs - desperately looking for opportunities to gain practical skills.
Don't conflate your dreams with reality. Centum and Britam have lost big in real estate - "asset management" - as new malls remain ghost towns. The lower class housing - this remains a pipedream - slums have existed and expanded rapidly since independence. This "sector" is dominated by smalltime landlords and slumlords - who are corrupt as hell - very chaotic sector. Is this what you're saying has grown? We are debating what has been done - not visions - when the Chinese build large scale cheap housing it will be all over the news. How would they do that when slum dwellers are dirt-poor with no 1K for rent? More debt? It's why you need private sector-led growth - not hard infra which noone uses - new incomes means new paying tenants.
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In short you have future visions - not present reality - of agriculture performance. Agric at present is doing quite badly.
We are transitioning from low-value crops (Uganda & TZ can have them) into high-value crops (horticulture, dairy & etc) - and then when Ruto become PORK - we will move the value chain - by enforcing value-addition. But first we have to discourage the planting of small-holder planting of maize, beans and such nonsense - by bitting the bullet - and allowing those products to be imported duty free - and have Galanas doing large scale planting of them - and then force our farmers to engage in high-value crops - and for those sectors that are already mature (like Tea) -force them to do value-addition - like we did for Macadamia. No Kenya tea should be sold in bulk. Sri Lanka did this - and they earn twice from their tea. We can double our tea earnings by simpling - decreeing they be packed and branded in Mombasa before shipping.
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TIVET is great - a future potential. The present again is doom - as dirt-cheap labor in Ethiopia steal the thunder - with Chinese setting up there. It wioll be very hard to attract manufacturers with our unionized labor - even with TIVET - cause you have to beat ET and such - where there are no unions and labor courts. Maybe automation - with robotics, etc - which is still hard to beat the first world or Chinese.
Yes Manufacturing is the toughest - but SGR is the start - esp if we build SEZs around it. SGR will become cheaper once we used it for it's purpose - to transport bulk non-containerized goods - I am talking clinker, iron & steel, cereals, such - and we now have excess electricity - that needs to be sold for cheap for industries.
Labor cost is acceptable if we improve worker productivity - and this where TIVET comes in - where companies are getting workforce with the right skills- therefore Jubilee huge investment in TIVET instead of universities - will mean companies can literally locate anyway - and get workforce who knows how to operate say CTC machine.
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It not all doom and gloom - we are doing okay in EPZ textile and apparel - been leading Africa for decades now (I guess post-Madagascar getting booted out of AGOA). What will work is EPZ and SEZ - where Chinese are allowed more leeway - and given incentives. Salaries outside Nairobi are set low (min salary) - but I have to agree that Manufacturing is going to be a tough nut to crack. I think we should aim for the construction industry - and focus on agriculture (high value) - where we have more chances of success. I don't see Jubilee hacking manufacturing....there is no incentive for politicians to do this...because there is no rent-seeking opportunities.This will remain Asian-driven sector in Kenya - only them seem to understands the money that can be made from it and the incredible hardwork needed. So sad.
TIVET is great - a future potential. The present again is doom - as dirt-cheap labor in Ethiopia steal the thunder - with Chinese setting up there. It wioll be very hard to attract manufacturers with our unionized labor - even with TIVET - cause you have to beat ET and such - where there are no unions and labor courts. Maybe automation - with robotics, etc - which is still hard to beat the first world or Chinese.
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Yes at present - it's bit moody depending on Mr Rain. That is why last year we did 6.3% and this year we will do 5.7% economic growth - with agri expected to take the hit.
In short you have future visions - not present reality - of agriculture performance. Agric at present is doing quite badly.
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I am sure Centum and Britam have all these data. If low-class lower middle housing is booming - why have cement sales flattened? The working class - that can afford 2-3M mortgage - already pay for housing - and cannot drive growth. They would just move from rental to own house - not have 2 or 3 houses. The un-housed slum-dwellers - these would be real NEW demand - sadly they have no cash to pay. Imposing 3% on tiny working class is unfair and ill-advised - afadhali hata VAT - which all consumers pay. Of course - just like Kibaki/Ngilu universal healthcare 3% on payslip in 2004 - it has hit a snag with court orders.
What must be cracked is INCOMES - until the slum dwellers have $$ to pay rent or mortgage - there can be no sustainable housing or end of slums - which are a symptom of poverty.
You're shooting in the dark as always using purely "common senses" to judge complex stuff. You should try to read that Hass report, find Cyton and Knight Frank. If you do not trust KNBS real estate data. Our real estate is very tiny just like our economy. The people struggling are those who made huge bets on the upper-end of the markets - there is an oversupply and there is reduced effective demand. The people who are dealing with lower-end of market - like Ederrman's GreatWall are making money. Edderman are building twenty-three (23) 34 floors apartments - 8 in Ngara - and 15 in Ngong roads - and they are closing sales - because they are selling units for 3M kshs.
(http://erdemann.co.ke/property/cache/mod_bt_property/15/1548056051-BACKDROP.jpg)
There is a huge effective demand in that segment. Many Kenyans can easily afford a 2-3M mortgage house - it about how much they pay rent. Landlords - are in the informal market - Uhuru just need to sort the land - give gov land for free - to developers - and developers will build house for 3m - and everyone will happily buy them.
As for Britam and the likes - they need to stop building malls and high-end office spaces - and start building 1-3m houses. With 10B - that they use to build skyscrapers - they can build even 10,000 units of cheap housing estates - and sell them easily - and make tonnes of money.
There is time for everything as bible says. There was a time when investing in universities made sense - now it doesn't with a cap of 70,000 students eligible annually - all absorbed by JAB(or whatever it call now). Now it's time to invest in TIVET and middle-level colleges - with all the Matangi's Es, Ds and Cs - desperately looking for opportunities to gain practical skills.
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Pundit and Ruto have many visions for the future because they have failed in the present. It is the status quo that matters not what could be. Debt-driven growth - is hollow - and you have rapid slum expansion - and starvation - as proof of growing poverty. Despite all the growth.
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The situation of the ground for majority small scale traders in informal sector. If DP office wanted to win hearts and minds it should focus on ways to solve problems like this. I think Kenya executive is very dysfunctional. Even in Nigeria the sickly buhari is able to delegate gate most of the work to his VP.
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How do you allow the Chinese "leeway" in SEZ? The unions will run to court and wages will go up. Also our power is still too costly compared to say Ethiopia. I think manufacturing will take a miracle. Your fix of flooding the market with cheap large-scale housing - and force local investors into manufacturing or agric value-adds - is doable with political will. But as you note this political will is lacking - plus GoK cannot afford to take on more debt - cause especially free housing is zero- or very low-ROI investment - unlike say roads. Slums are an efficient housing scheme :) - economically speaking - but inhuman and undignified. These super-poor folks will only benefit when real growth happens - permanent salaried jobs or cash in their pockets - which SGR or such hard infra-led growth don't provide. With Baringo or Turkana or Mandera - the perennial starving ASALs - they are the poster child of hollow growth and inequality.
It not all doom and gloom - we are doing okay in EPZ textile and apparel - been leading Africa for decades now (I guess post-Madagascar getting booted out of AGOA). What will work is EPZ and SEZ - where Chinese are allowed more leeway - and given incentives. Salaries outside Nairobi are set low (min salary) - but I have to agree that Manufacturing is going to be a tough nut to crack. I think we should aim for the construction industry - and focus on agriculture (high value) - where we have more chances of success. I don't see Jubilee hacking manufacturing....there is no incentive for politicians to do this...because there is no rent-seeking opportunities.This will remain Asian-driven sector in Kenya - only them seem to understands the money that can be made from it and the incredible hardwork needed. So sad.
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The day you stop ranting and start arguing with facts like HK does - I am talking data - then maybe we can take your seriously. Ruto always has his facts. The fact is the economy grew by 6.3%. Poverty has reduced from 46% to 35% as at 2016 - and by now I think we are probably at 30% poverty rate.
Pundit and Ruto have many visions for the future because they have failed in the present. It is the status quo that matters not what could be. Debt-driven growth - is hollow - and you have rapid slum expansion - and starvation - as proof of growing poverty. Despite all the growth.
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Ruto has left the gov for the drunkard Uhuru to ran - Kibicho and co' are the ones you need to ask to step in. Ruto is busy campaigning for 2022.
The situation of the ground for majority small scale traders in informal sector. If DP office wanted to win hearts and minds it should focus on ways to solve problems like this. I think Kenya executive is very dysfunctional. Even in Nigeria the sickly buhari is able to delegate gate most of the work to his VP.
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Banks are the only booming sector because they are lending to the government almost exclusively nowadays
Pundito , you shouldn't be quoting Hass and Knight Frank or Cytonn reports. It is in their interest to paint a rosy picture of their industry so they can keep drawing more capital. If you want to know the state of real estate look at cement manufacturers. How are they doing? Or what is our cement consumption?
Consumption is down to 4-year low which roughly coincides with SGR commencing:
https://www.standardmedia.co.ke/article/2001316334/demand-for-cement-drops-to-four-year-low
Things are thick
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Centum and Britam don't have the ability to predict the market. The market is dynamic. There is oversupply now and depressed demand as Matiangi has chased away Bazungu. I think what you fail to understand is that if we take advantages of Chinese construction machine and gov free land - we can get the economies of scales to bring down house prices and rental - at least at the lower segment. Gov owns a lot of idle lands. Bazungu did this with likes of Jericho and all those eastlando estates where rent upto now is 500shs or about - as competitive as tin shanty in Kibera - and we can do the same. We just need to give Chinese the seed money (this is where deduction or taxes come in) - and Chinese can deploy their incredible construction machine - and deliver us very cheap, sound and safe housing.
And as you said this hopefully will free lots of billions that Kenyans invest in rental flats.....and such investment can be redirected to cottage industries, agri-processing and other SME business that will provide employment.
There is no trick that gov can use to generate jobs and income - it's the people themselves to generate those jobs - gov job is to provide infrastructure - and the SMEs to provide the bulk of jobs.
The problem is tunnel-vision that most of the Kenyans have - they only see now like you - they are not that many visionaries like Bitange Ndemo who can imagine the country in 10-20yrs - and walk towards making it a reality.
I am sure Centum and Britam have all these data. If low-class lower middle housing is booming - why have cement sales flattened? The working class - that can afford 2-3M mortgage - already pay for housing - and cannot drive growth. They would just move from rental to own house - not have 2 or 3 houses. The un-housed slum-dwellers - these would be real NEW demand - sadly they have no cash to pay. Imposing 3% on tiny working class is unfair and ill-advised - afadhali hata VAT - which all consumers pay. Of course - just like Kibaki/Ngilu universal healthcare 3% on payslip in 2004 - it has hit a snag with court orders.
What must be cracked is INCOMES - until the slum dwellers have $$ to pay rent or mortgage - there can be no sustainable housing or end of slums - which are a symptom of poverty.
You're shooting in the dark as always using purely "common senses" to judge complex stuff. You should try to read that Hass report, find Cyton and Knight Frank. If you do not trust KNBS real estate data. Our real estate is very tiny just like our economy. The people struggling are those who made huge bets on the upper-end of the markets - there is an oversupply and there is reduced effective demand. The people who are dealing with lower-end of market - like Ederrman's GreatWall are making money. Edderman are building twenty-three (23) 34 floors apartments - 8 in Ngara - and 15 in Ngong roads - and they are closing sales - because they are selling units for 3M kshs.
(http://erdemann.co.ke/property/cache/mod_bt_property/15/1548056051-BACKDROP.jpg)
There is a huge effective demand in that segment. Many Kenyans can easily afford a 2-3M mortgage house - it about how much they pay rent. Landlords - are in the informal market - Uhuru just need to sort the land - give gov land for free - to developers - and developers will build house for 3m - and everyone will happily buy them.
As for Britam and the likes - they need to stop building malls and high-end office spaces - and start building 1-3m houses. With 10B - that they use to build skyscrapers - they can build even 10,000 units of cheap housing estates - and sell them easily - and make tonnes of money.
There is time for everything as bible says. There was a time when investing in universities made sense - now it doesn't with a cap of 70,000 students eligible annually - all absorbed by JAB(or whatever it call now). Now it's time to invest in TIVET and middle-level colleges - with all the Matangi's Es, Ds and Cs - desperately looking for opportunities to gain practical skills.
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Mwea rice irrigation seems to be doing well - hope this can be replicated countrywide.
https://www.nation.co.ke/business/Mwea-rice-farmers-income-rises-94pc/996-5111810-kjudy2/index.html
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M-pesa continues to see double digit growth - number of agents (new "jobs" or income revenues for SMEs') - now well into 226K.
https://www.businessdailyafrica.com/markets/marketnews/Mobile-cash-transactions-hit-Sh1-1trn-in-Q1/3815534-5111672-yu3gja/index.html
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Banks are the only booming sector because they are lending to the government almost exclusively nowadays
Pundito , you shouldn't be quoting Hass and Knight Frank or Cytonn reports. It is in their interest to paint a rosy picture of their industry so they can keep drawing more capital. If you want to know the state of real estate look at cement manufacturers. How are they doing? Or what is our cement consumption?
Consumption is down to 4-year low which roughly coincides with SGR commencing:
https://www.standardmedia.co.ke/article/2001316334/demand-for-cement-drops-to-four-year-low
Things are thick
Heart of the matter. The growth is public sector and the banks lending it money or mobile shylocks - which is all we are trying hard unsuccessfully to tell Pundit. Instead he accuses us of tunnel vision - cause he thinks we want to undermine Ruto. It is possible hard infrastructure -led growth is real yet uneven or unfelt on the ground at the same time. This fact plus the credit crunch has made many question the GoK numbers as they did Kibaki's 7% growth 2005-7.
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I always try to cross-reference data - from Hass/Cyton/Knigt Frank - together - with Cement stats - together with KNBS - and Banking sector reports- We also have building approvals plans by Nairobi & Mombasa city council providing crucial data - should give us an overall of how the sector is - Not Robina anecdotal evidence walking around Two Rivers.
KNBS does a good job cross-referencing their data anyway.
I thought I alluded to the flattening of cement demand and the reasons for that. And it linked to banking sector lending gov and reducing exposure in real estate amongst other sectors. Real estate is also leading in bad and doubtful loans that banks have to aggressively. provision for.
SGR phase 2 has been under construction.... I think cement or real estate is down due to banks refusing to lend, 2017 election blues and now Uhuru housing agenda is making most developers adopt a wait -n-see attitude.
Banks are the only booming sector because they are lending to the government almost exclusively nowadays
Pundito , you shouldn't be quoting Hass and Knight Frank or Cytonn reports. It is in their interest to paint a rosy picture of their industry so they can keep drawing more capital. If you want to know the state of real estate look at cement manufacturers. How are they doing? Or what is our cement consumption?
Consumption is down to 4-year low which roughly coincides with SGR commencing:
https://www.standardmedia.co.ke/article/2001316334/demand-for-cement-drops-to-four-year-low
Things are thick
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You're running on empty in a topic you're ill-prepared in - just shouting Ruto or Pundit this or that. There has been slowing of credit to private sector thanks to interest capping but not many Kenyans are complaining about banks loans killing them. It's a dicey situation. Yes digital loans have pretty much made up for the credit freeze. Hopefully, someone starts tracking the numbers that Tala, Branch and all these 50 digital lenders are doing. It surely must be crazy.
Heart of the matter. The growth is public sector and the banks lending it money or mobile shylocks - which is all we are trying hard unsuccessfully to tell Pundit. Instead he accuses us of tunnel vision - cause he thinks we want to undermine Ruto. It is possible hard infrastructure -led growth is real yet uneven or unfelt on the ground at the same time. This fact plus the credit crunch has made many question the GoK numbers as they did Kibaki's 7% growth 2005-7.
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You are so wrong... numbers LIE - cause they can be massaged or real metrics overlooked. Anecdotal evidence does not lie - you get a feeling of the ground live. Try it. What planet is this where real estate is booming? Mavoko? :) Cement sales have plateaued over 4 years - the same period you say construction has boomed. Of course the SGR is the big "construction" that has "boomed".
You say Britam or Centum can't predict the future... so who can? RV Pundit?? O yes they can - it's called data mining - predictive & analytical off-the-shelves are a dime a dozen - SAS, Tableau, name it. Any big-time investor or fund manager literally models projections day & night for a living. It's their core job to predict and yet they have not gone "low income housing" - do you think these veteran investors and hedgers are fools? Nope - it's cause halloo - slum dwellers have no income to pay for the housing. Uhuru know this, Rotich this, Ruto know this. So they came up with a knee-jerk 3% PAYE now in the courts.
The point remains - hard infra-led growth - by GoK public sector - is not felt mashinani where it matters. We know "long term" the urban and rural roads will bear fruits in investment and growth - also the power when it goes cheap. But with the skyrocketing debt GoK will not afford either free housing, subsidized power, SEZ tax breaks nor such cash incetives. Cause Njiraini & Rotich need all the pennies for Big 4 and debt repayments. It will be a while before we can see returns on the hard infra. Am not saying we will not. But you know my views on the SGR as a misplaced priority.
You're running on empty in a topic you're ill-prepared in - just shouting Ruto or Pundit this or that. There has been slowing of credit to private sector thanks to interest capping but not many Kenyans are complaining about banks loans killing them. It's a dicey situation. Yes digital loans have pretty much made up for the credit freeze. Hopefully, someone starts tracking the numbers that Tala, Branch and all these 50 digital lenders are doing. It surely must be crazy.
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Anecdotal evidence from a well-known negativo NASA card-carrying member has very little if any value. Let focus on data. KNBS do a great job referencing the cement data with real estate. The real estate sector is struggling because of wait-n-see attitude during the election and now with big 4 housing agenda promising to disrupt the market. The gov has the ability to fix real estate sector main bottlenecks (land - nearly 30% of the cost if not more) and horizontal infrastructure (roads, sewage, electricity that developers have to factor) - and of course gov is trying to deploy economies of scale by forcing everyone to contribute to this - so we can get big developers who are more efficient to come and turn the sector around. I say give them time. It's just one year.
We need all the infrastructure - roads, power, rails - and their multiplier effect may not be visible to the naked eye immediately - but over time it pays off.We saw the same nonsense when Thika SuperHighway was being constructed - that it was very expensive --ohoo Kibaki should have built Mombasa-Malaba - the main artery first - about a Billion Kshs for every KM - but we know by now - it's pretty much paid off.
The fact is the economy has been grown on average at round off of 6%. That is the indisputable fact that cannot be countered by anecdotal evidence of NASA economist like Ndiii.
You are so wrong... numbers LIE - cause they can be massaged or real metrics overlooked. Anecdotal evidence does not lie - you get a feeling of the ground live. Try it. What planet is this where real estate is booming? Mavoko? :) Cement sales have plateaued over 4 years - the same period you say construction has boomed. Of course the SGR is the big "construction" that has "boomed".
You say Britam or Centum can't predict the future... so who can? RV Pundit?? O yes they can - it's called data mining - predictive & analytical off-the-shelves are a dime a dozen - SAS, Tableau, name it. Any big-time investor or fund manager literally models projections day & night for a living. It's their core job to predict and yet they have not gone "low income housing" - do you think these veteran investors and hedgers are fools? Nope - it's cause halloo - slum dwellers have no income to pay for the housing. Uhuru know this, Rotich this, Ruto know this. So they came up with a knee-jerk 3% PAYE now in the courts.
The point remains - hard infra-led growth - by GoK public sector - is not felt mashinani where it matters. We know "long term" the urban and rural roads will bear fruits in investment and growth - also the power when it goes cheap. But with the skyrocketing debt GoK will not afford either free housing, subsidized power, SEZ tax breaks nor such cash incetives. Cause Njiraini & Rotich need all the pennies for Big 4 and debt repayments. It will be a while before we can see returns on the hard infra. Am not saying we will not. But you know my views on the SGR as a misplaced priority.
You're running on empty in a topic you're ill-prepared in - just shouting Ruto or Pundit this or that. There has been slowing of credit to private sector thanks to interest capping but not many Kenyans are complaining about banks loans killing them. It's a dicey situation. Yes digital loans have pretty much made up for the credit freeze. Hopefully, someone starts tracking the numbers that Tala, Branch and all these 50 digital lenders are doing. It surely must be crazy.
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I always try to cross-reference data - from Hass/Cyton/Knigt Frank - together - with Cement stats - together with KNBS - and Banking sector reports- We also have building approvals plans by Nairobi & Mombasa city council providing crucial data - should give us an overall of how the sector is - Not Robina anecdotal evidence walking around Two Rivers.
KNBS does a good job cross-referencing their data anyway.
I thought I alluded to the flattening of cement demand and the reasons for that. And it linked to banking sector lending gov and reducing exposure in real estate amongst other sectors. Real estate is also leading in bad and doubtful loans that banks have to aggressively. provision for.
SGR phase 2 has been under construction.... I think cement or real estate is down due to banks refusing to lend, 2017 election blues and now Uhuru housing agenda is making most developers adopt a wait -n-see attitude.
Banks are the only booming sector because they are lending to the government almost exclusively nowadays
Pundito , you shouldn't be quoting Hass and Knight Frank or Cytonn reports. It is in their interest to paint a rosy picture of their industry so they can keep drawing more capital. If you want to know the state of real estate look at cement manufacturers. How are they doing? Or what is our cement consumption?
Consumption is down to 4-year low which roughly coincides with SGR commencing:
https://www.standardmedia.co.ke/article/2001316334/demand-for-cement-drops-to-four-year-low
Things are thick
KNBS is the source of the grim cement demand. So we know Cement demand has been falling.
If cement consumption drops in 2018 to 2014 levels then you should ask yourself what is different between 2014 and 2018. I see SGR commencing in 2014. Interest capping was introduced in August 2016.Banks have been lending to government with crazy fervor since the capping. So I strongly doubt that’s the driver
Building approvals at least for Nairobi dipped. This explains that the demand is falling not just due to SGR but also real estate probably overheating:
https://www.businessdailyafrica.com/economy/New-house-approvals-dip-to-four-year-low/3946234-5032080-14qubuuz/index.html
In short, the extra spike in cement demand by SGR is over,and the real estate is not doing as well. You say banks are pulling out of real estate? Why would they pull out of a booming sector? Burning their fingers is a good reason which may explain the growing non-performing loans to the industry. And why would credit to a booming industry go bad? Glut perhaps
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I get your point. We disagree though on when cement consumption leveled. I can check again but I think the apex was 2015/2016 - If I can recall when Moi was leaving we had like 1.2M metric tonnes of cement consumption/production - that increased to 2M by 2007 - and by time Kibaki was handing over power - it was around 4.5M - around 5.7M in 2014- and by 2016 Jubilee had taken it to 6.7m - and in 2017 with elections it came down to 6.5M (general slow down of the economy & credit freeze) - and now it's down to 5.8M or about (2018).
So as you can see cement consumption dropped from 2016 - with credit freeze, election slowdown and now big 4 housing lull - I think this is short term lull before the storm!
Uhuru need to get Big 4 Housing Agenda off ground - and those 500,000 units will led to increase cement consumption.
There is huge wait-n-see because gov has indicated it will alter the game - so no financier will fund real estate - buyers are also waiting to see - Uhuru brand new Chinese 3M units.
KNBS is the source of the grim cement demand. So we know Cement demand has been falling.
If cement consumption drops in 2018 to 2014 levels then you should ask yourself what is different between 2014 and 2018. I see SGR commencing in 2014. Interest capping was introduced in August 2016.Banks have been lending to government with crazy fervor since the capping. So I strongly doubt that’s the driver
Building approvals at least for Nairobi dipped. This explains that the demand is falling not just due to SGR but also real estate probably overheating:
https://www.businessdailyafrica.com/economy/New-house-approvals-dip-to-four-year-low/3946234-5032080-14qubuuz/index.html
In short, the extra spike in cement demand by SGR is over,and the real estate is not doing as well. You say banks are pulling out of real estate? Why would they pull out of a booming sector? Burning their fingers is a good reason which may explain the growing non-performing loans to the industry. And why would credit to a booming industry go bad? Glut perhaps
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Anecdotal evidence is from my own eyeballs - not Ndii - his is data based. Britam actually targets middle-income commercial & residential housing - Ngong Road, Thika Road, Outer Ring and such middle- or low-class locales - with increasingly dismal results. Here's more anecdotal evidence from the independent media. 8) 8)
Struggling shopping malls and what it means for Nairobi
By MILLICENT MWOLOLO, @milimwololo mmwololo@ke.nationmedia.com
September 21st, 2017 4 min read
(https://nairobinews.nation.co.ke/wp-content/uploads/2017/09/BDTRM2108.jpg)
Thika Road Mall, popularly and simply known as TRM, is one of the few that have weathered current economic crisis. PHOTO | FILE
https://nairobinews.nation.co.ke/news/struggling-shopping-malls-nairobi
Rent goes down as space bubble threatens to burst
by CYNTHIA ILAKO @LadyKanyali
Counties
20 December 2018 - 00:00
(https://lh3.googleusercontent.com/SRUBe9PomIpj9LS5YK3y9DaGxk6VunlDzSlwnkegX07FV2SKvXyf9cOuGVfS9xWDh6s8di8kWi45BfMQifvumxQ-SLeBPQ=s512)
Front view of the newly build Karen Waterfront on August 28,2018. e building will host retail shops. /ENOS TECHE
An oversupply in commercial retail space boosted by increased development of malls has led to high competition, especially in the low-end market.
Despite retail space being at the centre of new real estate developments in the country, mall owners have had to reduce rent prices to stay afloat in the highly competitive market.
Cytonn’s Kenya Retail Sector report 2018 shows developers have had to reduce rent by 6.2 per cent to Sh132.1 per square foot compared to Sh140.9 last year. This is 14.72 per cent lower than Sh154.9 rent charged per square foot in 2016.
The glut in commercial retail real estate has also led to a decline in non-residential developments.
Kenya National Bureau of Statistics data shows the value of non-residential buildings approved between January and June dropped 35.57 per cent to Sh37.58 billion compared to Sh58.33 billion the same period
last year.
This in turn resulted in a 27.7 per cent decline in the value of approved building plans during the review period to Sh100.76 from Sh128.67 over the same period last year.
Shopping malls, especially in low end areas, now have to compete for footfall with second tier supermarkets and stalls.
https://www.the-star.co.ke/counties/2018-12-20-rent-goes-down-as-space-bubble-threatens-to-burst/
Tenants now demand lower rent as malls bubble bursts
Dominic Omondi 09th Sep 2018 00:00:00 GMT +0300
(https://www.standardmedia.co.ke/images/saturday/bgpozvcni2epqj35b940ecd593fc.jpg)
Greenspan Mall in Donholm estate taken on 29th December 2015. [Wilberforce Okwiri, Standard]
Stanlib Income-Real Estate Investments Trust might have pinned its hopes too high when it sank the first cash it raised into Greenspan Mall.
The allure of shopping malls that has taken hold in the country for a while now is quickly fading, leaving the South African-based financial provider along hundreds of other investors in a discomfiting financial position.
Stanlib’s rental income declined from Sh135 million to Sh132 million in the first six months of this year, with their net profit dipping by 16 per cent from Sh78 million in the first half of 2017 to Sh65 million by June this year.
Besides Greenspan Mall in Nairobi’s Eastlands, the investment firm also owns Bay Holdings and Highway House, all of which received lower rents in the period under review.
https://www.standardmedia.co.ke/business/article/2001295008/tenants-now-demand-lower-rent-as-malls-bubble-bursts
And here's some of that "booming" middle class residential. :)
Empty house and broken home
BY DAVID ONJILI
10th April 2019
(http://www.nairobibusinessmonthly.com/wp-content/uploads/2019/04/saupload_09_04_19_housing_burden.jpg)
Maxwell Onyande won the American Green Card and successfully relocated with his family in April 2018. Before departure, he had been living in a gated compound in Katani area of Syokimau, Machakos County. A five bedroomed house he had constructed to his taste, going by prevailing market conditions; he set out to rent it and earn some income not to mention the pride of being in the enviable club of Nairobi’s landlords. He estimated about Sh70, 000 in monthly rent. Two years down the line, his house is vacant despite lowering the rent to Sh35, 000.
A radius of half a kilometre from where Onyande’s house is, are several houses completed by property developers fetching some Sh10 million for a four bed-roomed unit. The occupancy to date is not more than half despite having been on sale for over a year now. This scenario continues to replicate itself in many residential properties within Nairobi and its environs.
In Hurlingham area, high-rise office blocks are unoccupied, many others coming up. Real estate developers are putting up with a plateau in demand for their units. Yet, this is just but part of the problem; Kenyans who invested their hard earned cash in purchasing houses are suffering with nobody to turn to.
Emily Aminde has been separated from her husband of six years for a year now. Life was rosy for the human relations graduate and employee of a five star hotel in the city. Her husband, James worked for a bourse listed company and they were blessed with two daughters, four and two.
The couple, like many others, had been approached by a real estate company and sold the dream of owning a home. The idea that rent would be a bygone was such an attractive persuasion that James, Emily’s husband got mortgage from a commercial bank secured by his salary in the form of a monthly check off. For years, they seemed like the ideal couple, kids going to school and both working and living in the ideal address they had chosen until the rain started beating.
Soon, James’ employer moved operations to Egypt citing a harsh business operational environment in the country. First he could not honour his obligations with the bank to pay the mortgage and also keep up the lifestyle he had accustomed his family to. This brought about an unprecedented strain on his marriage, which sadly ended in a separation with the wife.
As a man, James’ pride was his family and they were the reason why he woke up each morning to go to work. The monthly mortgage repayments ate deep into his saving to a point he could no longer sustain it, it pains him that despite having paid more than half the amount to purchase the house he still has no full custody of the title deed and house. James painfully admits that he took to alcohol to drown his worries and this was the major cause of him separating from the wife who could not tolerate his bingeing.
Luckily, his church, situated along Mombasa Road came to his rescue through one of its pastors. James checked into a rehabilitation facility to mitigate on his over indulgence. It is six months now since he stopped drinking. He has even gotten a job in a warehouse along Mombasa Road. James has restored his relationship with his family and he admits that it gives him joy that his life is back on track because he wants to be a role model to his children. Despite being separated at the moment, their church has intervened and offer them counselling as they seek to re-unite the man to his family when ready.
James admits that many Kenyans have put a strain on themselves by going for mortgages to purchase houses and when they lose their jobs the situation is unbearable. He says that he would rather build a home in his upcountry county of Siaya than purchase one in Nairobi because the mortgage is very high. Renting seems a viable option to him going by the exorbitant prices the real estate property developers are charging on property.
http://www.nairobibusinessmonthly.com/empty-house-and-broken-home/
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Nobody is disagreeing that real estate is struggling - but I agree with Uhuru - that this low hanging fruit - the big 4 housing agenda - will unlock the real estate and double it.
Here is KNBS take
Real estate as share of our GDP is decreasing - 2014 to 2018. It now 7% of our GDP - Jubilee want to double this to 14% through Big 4 Housing agenda.
(Real estate……………………………………………... 7.7 7.5 7.6 7.1 7.0)
Construction
2.10. Growth of the construction sector decelerated to 6.6 per cent in 2018 compared to 8.5
per cent in 2017. Notwithstanding the slowed growth, increased construction activities were
evident in 2018 especially the ongoing construction of phase two of the Standard Gauge
Railway (SGR) and other public investments in transportation infrastructure. The growth
was reflected in the increase in consumption of cement from 5,856.6 million tonnes in 2017 to
5,948.7 million tonnes during the period under review. The growth was also partly attributed to
notable increases in the importation of key construction materials. For instance, the quantity
of cement imported increased while that of iron and steel bars rose two-fold in 2018. Growth
in the length of roads constructed slowed to 9.5 per cent in 2018 compared to 30.6 per cent
in 2017. Further, slowed performance was manifested in the uptake of credit to building and
construction sector that increased marginally (1.8 per cent) in the review period compared to
6.8 per cent growth in 2017.
Credit reduced marginally by 0.5% - still nearly 370B was advanced to the sector.
4.16. Table 4.9a presents credit advanced by commercial banks from 2014 to 2018. Commercial banks’
credit grew by 5.9 per cent from KSh 3,344.9 billion as at end of 2017 to KSh 3,543.9 billion as at end
of 2018. Credit advanced to manufacturing sector increased by 6.5 per cent from KSh 314.2 billion as at
end of 2017 to KSh 334.6 billion as at end of 2018 while credit advanced to Wholesale and retail trade,
hotels and restaurants increased by 2.9 per cent to KSh 429.3 billion as at end of 2018. Credit advanced
to real estate decreased marginally by 0.5 per cent from KSh 370.7 billion as at end of 2017 to KSh 368.7
billion as at end of 2018. In the public sector, commercial banks credit to the National Government
increased by 16.9 per cent to KSh 956.3 billion while credit advanced to the County Governments increased by 9.2 per cent to KSh 4.3 billion as at end of 2018. Credit to enterprises, parastatal bodies and
other public entities decreased by 10.9 per cent to KSh 96.6 billion as at end of 2018.
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KNBS on electricity - Kenya approaching 3,000MW and electricity demand is starting to rise.
Total installed electricity capacity increased from 2,339.9 MW in 2017 to 2,711.7 MW in
2018. Total electricity demand increased by 7.9 per cent to 11,182.0 GWh in 2018 compared
to 10,359.9 GWh in 2017. Domestic demand for electricity increased from 8,410.1 GWh in
2017 to 8,702.3 GWh in 2018. There was additional electricity generation of 360 MW to the
grid from Lake Turkana Wind Power Project (310 MW) and Garissa Solar Power Project
(50MW). The Early Oil Pilot Scheme started producing 2000 Barrels per day (bbl/d) from
Ngamia and Amosing fields in 20
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Yes. It's why we call it voodoo or pie-in-the-sky - or Ndii "portal" - cause only Rotich and the elites and Fuliza & Equity shylocks feel it. Mashinani hakuna kitu - pesa onge. Betting is just like alcoholism or drug addiction - a sector which flourish at big negative impact on society. Binge borrowing is one of the drivers of betting - with easy access - a sector that GoK fight to discourage by confiscating machines and heavy taxes.
You have no real growth outside the hard infra and banking. Just future projections and hope - which springs eternal. :)
The fact is the economy has been grown on average at round off of 6%. That is the indisputable fact that cannot be countered by anecdotal evidence of NASA economist like Ndiii.
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Hope springs eternal. Any actual strategy to achieve it - except milking the tiny working class. Which of course has already run into legal headwinds - no consultaion or law in place. "Slum upgrade" has been tossed about for years. Housing is as complex as manufacturing to crack - cause the market forces determine what people must pay - unless Uhuru can pull 5 or 10B usd from his hat. It's a noble agenda but not holding my breath. MILLIONS of folks are homeless slum dwellers. 50%+ of Nairobi is slum dwellers. 2M folks just Nairobi. Trouble is their pocket not high rents.
Nobody is disagreeing that real estate is struggling - but I agree with Uhuru - that this low hanging fruit - the big 4 housing agenda - will unlock the real estate and double it.
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7% single-digit increase in consumption - despite the 3X last-mile connections? 8) 8) Means the overwhelming bulk of the last-miles peasants have never flipped the switch. Too costly - which is why they were on firewood or kerosene in the first place. Mbeca. The hard infra myth - this is hardly new phenomena.
KNBS on electricity - Kenya approaching 3,000MW and electricity demand is starting to rise.
Total installed electricity capacity increased from 2,339.9 MW in 2017 to 2,711.7 MW in
2018. Total electricity demand increased by 7.9 per cent to 11,182.0 GWh in 2018 compared
to 10,359.9 GWh in 2017. Domestic demand for electricity increased from 8,410.1 GWh in
2017 to 8,702.3 GWh in 2018. There was additional electricity generation of 360 MW to the
grid from Lake Turkana Wind Power Project (310 MW) and Garissa Solar Power Project
(50MW). The Early Oil Pilot Scheme started producing 2000 Barrels per day (bbl/d) from
Ngamia and Amosing fields in 20
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Money supply is increased - But I guess we have to find your real economy.
4.7. Table 4.2 presents various money supply aggregates for 2014 to 2018. In 2018, money supply
(M1) grew by 6.6 per cent in 2018 compared to a 5.8 per cent growth in 2017. Quasi money deposits
held by commercial banks and other deposit taking institutions increased by 9.7 per cent in 2018
compared to 10.9 per cent in 2017. deposit. Money supply (M2) grew by 8.0 per cent resulting to
overall liquidity growing by 10.9 per cent to KSh 4,550.9 billion in 2018.
Yes. It's why we call it voodoo or pie-in-the-sky - or Ndii "portal" - cause only Rotich and the elites and Fuliza & Equity shylocks feel it. Mashinani hakuna kitu - pesa onge. Betting is just like alcoholism or drug addiction - a sector which flourish at big negative impact on society. Binge borrowing is one of the drivers of betting - with easy access - a sector that GoK fight to discourage by confiscating machines and heavy taxes.
You have no real growth outside the hard infra and banking. Just future projections and hope - which springs eternal. :)
The fact is the economy has been grown on average at round off of 6%. That is the indisputable fact that cannot be countered by anecdotal evidence of NASA economist like Ndiii.
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3X increase - is from 2013 - not annually - When Jubilee came - electricity connection was about 2.5m - now it about 6.5M accounts -
These are Kibaki electricity numbers - 2.5M customers consuming 1,300MW - with the installed capacity I think around 1,500mw.
And Jubile in six or so years has - taken it to 6.5M customers consuming twice about 2,700MW (nearly doubling it) - consumption has also doubled from 6,500 GWH to now 11,182.
In short Jubilee has done a great job in just six years - and in ten years when Uhuru hands the baton to Ruto - the picture will be very clear.
Yes Jubilee had targetted 5,000MW - but they are closer to 3,00MW now. Uhuru is just 2,000MW short - from achieving what NDii thought was impossible vision.
7% single-digit increase in consumption - despite the 3X last-mile connections? 8) 8) Means the overwhelming bulk of the last-miles peasants have never flipped the switch. Too costly - which is why they were on firewood or kerosene in the first place. Mbeca. The hard infra myth - this is hardly new phenomena.
KNBS on electricity - Kenya approaching 3,000MW and electricity demand is starting to rise.
Total installed electricity capacity increased from 2,339.9 MW in 2017 to 2,711.7 MW in
2018. Total electricity demand increased by 7.9 per cent to 11,182.0 GWh in 2018 compared
to 10,359.9 GWh in 2017. Domestic demand for electricity increased from 8,410.1 GWh in
2017 to 8,702.3 GWh in 2018. There was additional electricity generation of 360 MW to the
grid from Lake Turkana Wind Power Project (310 MW) and Garissa Solar Power Project
(50MW). The Early Oil Pilot Scheme started producing 2000 Barrels per day (bbl/d) from
Ngamia and Amosing fields in 20
7% single-digit increase in consumption - despite the 3X last-mile connections? 8) 8) Means the overwhelming bulk of the last-miles peasants have never flipped the switch. Too costly - which is why they were on firewood or kerosene in the first place. Mbeca. The hard infra myth - this is hardly new phenomena.
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Pundit if 80% of the last-mile folks flipped the switch - there would be instant countrywide blackout. For inept fools like Uhuru & Eugene - or Chelugui - who can't deliver Galana or simple dam. Tough luck with public housing. Uhuru should just focus on food and universal health. I mean Tugens n Turkanas were dropping dead a month ago - since independence - big full granaries in Eldoret and Kitale just needing TRANSIT - sembuse housing? Big 4 is over ambitious - especially housing and manufacturing. Focus resources and attention to food - most BASIC item since eternity - awachane na pipedreams.
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We need people who are ambitious and visionaries. Basic - how do you propose we deal with Turkana or Baringo - truck people maize in Eldoret or you mean release gov maize for free for every starving Kenyan? Do you know how difficult it is to drive from Eldoret to Turkana - and without fixing infrastructure - how you cannot fix what ails turkana - (insecurity, drought, etc) - we need roads, telecommunications and the whole shebang in turkana - for turkana and part of baringo - to emerge from wilderness.
But you'll dismiss building roads in turkana as useless - you rather we somehow feed turkanas?
We have these arguments before - when computers came - some said African didn't computer or phones - they needed food - when m-pesa started - some here said - turkana needed food - not m-pesa -
Turkana need all the infrastructure you enjoy in San Francisco - roads, broadband, name it.
Pundit if 80% of the last-mile folks flipped the switch - there would be instant countrywide blackout. For inept fools like Uhuru & Eugene - or Chelugui - who can't deliver Galana or simple dam. Tough luck with public housing. Uhuru should just focus on food and universal health. I mean Tugens n Turkanas were dropping dead a month ago - since independence - big full granaries in Eldoret and Kitale just needing TRANSIT - sembuse housing? Big 4 is over ambitious - especially housing and manufacturing. Focus resources and attention to food - most BASIC item since eternity - awachane na pipedreams.
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The DIMWIT Uhuru can't hack any of these - these are Kibaki spillovers. Already the fool is "missing" after Ruto crew scared him. :) Labda Ruto - despite his unwashed, ungroomed nature he has energy and fiat to ensure some progress. You need more SOUND THINKING in a leader - like lame old Kibaki - which lacks in Uhuru. Ruto big energy but hare-brained. Acts before thinking. It's why you agree Nairobi-Macha-Kiambu-Kajiado metropolis is the ripe hanging fruit - but your smart alec starts with where old line already exist.
Yes we need infrastructure - and other inputs- we just disagree here and there on priorities and approaches. And "China Model". Lovely debating you - the Ruto passion shines through. Hope you are not as corrupt. And don't turn Ndii into another Almighty Jezebel - his opinion just like ours doesn't stop Uhuru or Ruto from thinking.
We need people who are ambitious and visionaries. Basic - how do you propose we deal with Turkana or Baringo - truck people maize in Eldoret or you mean release gov maize for free for every starving Kenyan? Do you know how difficult it is to drive from Eldoret to Turkana - and without fixing infrastructure - how you cannot fix what ails turkana - (insecurity, drought, etc) - we need roads, telecommunications and the whole shebang in turkana - for turkana and part of baringo - to emerge from wilderness.
But you'll dismiss building roads in turkana as useless - you rather we somehow feed turkanas?
We have these arguments before - when computers came - some said African didn't computer or phones - they needed food - when m-pesa started - some here said - turkana needed food - not m-pesa -
Turkana need all the infrastructure you enjoy in San Francisco - roads, broadband, name it.
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Kibaki of the yore -60s,80s and 90s was great - the Kibaki that became PORK was mostly senile.It's like Raila now - he is senile - just like everyone will become when age takes it toll.
The Kibaki that I supported in 90s was not the Kibaki that became PORK. Most of you are supporting him NOW but he basically squandered an opportunity to right Moi wrongs and got us to near civil war in 2007.Imagine calling the armed forces to quell protestors and the international community to mediate.2007/2008 remain kenyan lowest moment - Ochuka nightmare didn't last a night.
He should have done a better job managing politics. The economy after Moi was only going up. It really had no option except to grow.
UhuRuto are the real deal for me. I know most of you just like criticism but in the dynamic duo - I saw a very effective lean machine that gots a lot done - that managed the politics and unity of the country - and we are really in a sweet spot. Yes things could be better - but look at Rwanda -or TZ - Kagame is doing 7% - Uhuru is doing 6%. We probably lose that 1% to corruption but I won't cry about that.
Jubilee has done great. Greater than many want to acknowledge. Somebody that takes 50B economy and doubles it in 6yrs cannot be a failure. They started from NARA (4% - ignored the rebasing for argument sake) - and so it was harder for them - compared to starting from the recession (-1.7%) like Kibaki - they had all ICCs and shenagians.
I think you're very wrong when it comes to Ruto. I know you probably think I support Ruto because he is my tribeman. That part is true - but I truly think Ruto is the kibaki of the yore - he definitely lacks the economic depth - but he is nevertheless ambitious, brilliant, hardworking and energetic -I believe the transformation we will see under Ruto will be massive.
As regard corruption - I think it's a necessary evil for Ruto to be able to compete with Uhurus and generally finance his politics. Sonko has shown us you can be corrupt jailbird but still get the job done. Kagame kills a few folks once in a while - so did Obama - it just those things you've got to do because politics is a dirty game.
What matters is the PROVEN TRACK RECORD. Not long theories like Raila. We also don't need folks with rear view - with huge axe to grind like Raila - we need to move forward - and forget about historical stuff that are so intractable - and in WSR this country will make great strides forward...with Raila...we will be back to civil war scenarios.
We need visionaries like Bitange Ndemo who can imagine the future. We don't need people reminding us about our lost past.
The DIMWIT Uhuru can't hack any of these - these are Kibaki spillovers. Already the fool is "missing" after Ruto crew scared him. :) Labda Ruto - despite his unwashed, ungroomed nature he has energy and fiat to ensure some progress. You need more SOUND THINKING in a leader - like lame old Kibaki - which lacks in Uhuru. Ruto big energy but hare-brained. Acts before thinking. It's why you agree Nairobi-Macha-Kiambu-Kajiado metropolis is the ripe hanging fruit - but your smart alec starts with where old line already exist.
Yes we need infrastructure - and other inputs- we just disagree here and there on priorities and approaches. And "China Model". Lovely debating you - the Ruto passion shines through. Hope you are not as corrupt.
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https://rawpolitics.co.ke/2019/05/why-i-support-ruto-the-two-main-reasons/?fbclid=IwAR0cHJiMB1W2D4R41l2VPPmMRlVQXEkVU23pD2hfrzoh0NS53wGvF5Niw34
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RV unless you're 60 like Omollo I don't see how you supported the Kibaki of yore in 60s to 90s. If you're 20s or 30s you are limited to Ruto ageset if you're ageist. Save for senility age is a non-issue - you need sober mature thinking not hyperactivity.
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About economic development, I might be wrong about Ruto - but you're wrong to state "Kenya we are on the cusp of a revolution" or "we are on the verge of prosperity". No we are not. You acknowledged in the past that it will take 50-100 years to rise to developed market status. The "cusp" or leapfrog and 50-100 years long wait can't be true at the same time.
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I don't need to live in 70s to know Kibaki was brilliant. I grew up in 90s (became politically aware) and my father was big kibaki supporter - I think in 92 & 97 - the 3 kibaki votes got in our entire constituency - were definitely from my family.I noticed Ruto brilliance when I was at UON - in the sunset of Moi. I thought anybody who could boot Biwwott & grp from the kitchen cabinet was some serious talent - and obviously by now - everyone knows Ruto is a gifted politician.
RV unless you're 60 like Omollo I don't see how you supported the Kibaki of yore in 60s to 90s. If you're 20s or 30s you are limited to Ruto ageset if you're ageist. Save for senility age is a non-issue - you need sober mature thinking not hyperactivity.
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I think you're misquoting me. Kenya will become developed in 2050 - not in 50yrs - but in 30yrs. Kenya will join the proper middle class (like South Africa) in around 2032 when Ruto finishes his 2nd term (GDP will be around 300-400B dollars against a population of around 60M then).
WB/IMF define the terms here
Threshold GNI/Capita (current US$)
Low-income < 995
Lower-middle income 996 - 3,895 - Kenya is here now - GDP per capita around 2,000 now.
Upper-middle income 3,896 - 12,055
High-income > 12,055
My projection is that Kenya GDP will be around 150B - in 2023 against pop of 52M - around a GDP per capita slightly shy of 3,000.
Kenya will join upper middle class when it get to GDP of possibly 200-250B dollars & pop of 57m -by 2027 (3,900 usd threshold) - and definitely by 2030 it's GDP per capita will be around 5,000 -(GDP greater than 300M for pop of 60M).
By 2040 - Kenya GDP will be around 1 trillion dollars then with a population of 65-70m - Kenya gdp per capita will be around 10-12k - at the cusp of a developed country.
By 2050 - Kenya GDP may well be around 1.5 trillion dollars with a population of 75-80m - comfortably a developed high-income country.
The reason why this will happen - increasing economic growth rate and rapidly declining population growth - meaning more wealth is being created.
About economic development, I might be wrong about Ruto - but you're wrong to state "Kenya we are on the cusp of a revolution" or "we are on the verge of prosperity". No we are not. You acknowledged in the past that it will take 50-100 years to rise to developed market status. The "cusp" or leapfrog and 50-100 years long wait can't be true at the same time.
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So you mean you admire the brilliance of young Emilio. That's different from "supporting" - cause you cannot say you support TJ Mboya or JJ Kariuki after the fact. Ruto is no doubt gifted - we merely disagree what he is gifted in. By me he uses his exceptional ability to do more evil than good. To you he is a do-gooder with a few rough edges.
I don't need to live in 70s to know Kibaki was brilliant. I grew up in 90s (became politically aware) and my father was big kibaki supporter - I think in 92 & 97 - the 3 kibaki votes got in our entire constituency - were definitely from my family.I noticed Ruto brilliance when I was at UON - in the sunset of Moi. I thought anybody who could boot Biwwott & grp from the kitchen cabinet was some serious talent - and obviously by now - everyone knows Ruto is a gifted politician.
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Yes the big factor is demographics. The demographic revolution is a natural force that can only be squandered by corruption. Like Nigeria has done - big highly educated populace but super corrupt - not even the Cardinal got a single genuine document. Nigeria growth has been stalled by graft and instability - the latter largely stems from the former. We also need to dispense the "diaspora remittance" fallacy - which is a big brain-drain. Kenya needs to nurture, preserve, attract and retain quality manpower - as we invest more and more in higher education and research.
I think you're misquoting me. Kenya will become developed in 2050 - not in 50yrs - but in 30yrs. Kenya will join the proper middle class (like South Africa) in around 2032 when Ruto finishes his 2nd term (GDP will be around 300-400B dollars against a population of around 60M then).
WB/IMF define the terms here
Threshold GNI/Capita (current US$)
Low-income < 995
Lower-middle income 996 - 3,895 - Kenya is here now - GDP per capita around 2,000 now.
Upper-middle income 3,896 - 12,055
High-income > 12,055
My projection is that Kenya GDP will be around 150B - in 2023 against pop of 52M - around a GDP per capita slightly shy of 3,000.
Kenya will join upper middle class when it get to GDP of possibly 200-250B dollars & pop of 57m -by 2027 (3,900 usd threshold) - and definitely by 2030 it's GDP per capita will be around 5,000 -(GDP greater than 300M for pop of 60M).
By 2040 - Kenya GDP will be around 1 trillion dollars then with a population of 65-70m - Kenya gdp per capita will be around 10-12k - at the cusp of a developed country.
By 2050 - Kenya GDP may well be around 1.5 trillion dollars with a population of 75-80m - comfortably a developed high-income country.
The reason why this will happen - increasing economic growth rate and rapidly declining population growth - meaning more wealth is being created.
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I supported kibaki seriously in 2002...I actually remember "stealing" some votes as ECK clerk from Kalenjin old men who were refusing to vote because Moi was not on the ballot.
So you mean you admire the brilliance of young Emilio. That's different from "supporting" - cause you cannot say you support TJ Mboya or JJ Kariuki after the fact. Ruto is no doubt gifted - we merely disagree what he is gifted in. By me he uses his exceptional ability to do more evil than good. To you he is a do-gooder with a few rough edges.
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Kenya is just about to hit the sweatspot in demographic - of average of 2 kids per woman (a reality only in RSA, Namibia & Bostwana in SSA) - we are now about 3 kids - and that will bring lots of great stuff. This is already happening in mt Kenya region. They are enjoying demographic dividend.For example we won't be building new schoools - but improving existing ones - we won't be build new hospitals - but improving the existing ones - we won't be expanding infrastructure - just maintaining it. With less well spaced kids - families will start to ramp up savings - for investments - and will improve their quality of living.
The only blot is ASAL regions - who are in 1960s - and we have to really make sure we don't abandon them,
Nigeria is big mess - don't even start me on them.
Yes the big factor is demographics. The demographic revolution is a natural force that can only be squandered by corruption. Like Nigeria has done - big highly educated populace but super corrupt - not even the Cardinal got a single genuine document. Nigeria growth has been stalled by graft and instability - the latter largely stems from the former. We also need to dispense the "diaspora remittance" fallacy - which is a big brain-drain. Kenya needs to nurture, preserve, attract and retain quality manpower - as we invest more and more in higher education and research.
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Gee 8) :o I guess you're as corrupt as Ruto.
I supported kibaki seriously in 2002...I actually remember "stealing" some votes as ECK clerk from Kalenjin old men who were refusing to vote because Moi was not on the ballot.
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What's your take on diaspora remittance - is it a worthwhile return? I see the brain drain as a big loss - cause the Green Card "lottery" is rigged to mop the best. China has her own Thousand Talents or something - that Trump's been whinging about.
Kenya is just about to hit the sweatspot in demographic - of average of 2 kids per woman (a reality only in RSA, Namibia & Bostwana in SSA) - we are now about 3 kids - and that will bring lots of great stuff. This is already happening in mt Kenya region. They are enjoying demographic dividend.For example we won't be building new schoools - but improving existing ones - we won't be build new hospitals - but improving the existing ones - we won't be expanding infrastructure - just maintaining it. With less well spaced kids - families will start to ramp up savings - for investments - and will improve their quality of living.
The only blot is ASAL regions - who are in 1960s - and we have to really make sure we don't abandon them,
Nigeria is big mess - don't even start me on them.
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Lots of mathiness - conflation - hiding behind the forest of numbers. Expand this "Energy Demand" table 2005 to 2018. The Jubilee whirlwind connections are ghost meters - that never flipped the switch. Which backs my point in this thread - about voodoo growth unfelt on the ground - driven by misplaced oversupply of hard infra.
3X increase - is from 2013 - not annually - When Jubilee came - electricity connection was about 2.5m - now it about 6.5M accounts -
These are Kibaki electricity numbers - 2.5M customers consuming 1,300MW - with the installed capacity I think around 1,500mw.
And Jubile in six or so years has - taken it to 6.5M customers consuming twice about 2,700MW (nearly doubling it) - consumption has also doubled from 6,500 GWH to now 11,182.
In short Jubilee has done a great job in just six years - and in ten years when Uhuru hands the baton to Ruto - the picture will be very clear.
Yes Jubilee had targetted 5,000MW - but they are closer to 3,00MW now. Uhuru is just 2,000MW short - from achieving what NDii thought was impossible vision.
(http://www.nipate.org/index.php?action=dlattach;topic=7520.0;attach=477;image)
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So what led to the increase from 8,000 GWH (2013) to 11,000 GWH as of last year(2018). Are those 3,000 GHWS new demands ghost meters.You need to understand power consumers everywhere is dominated by few big customers (in kenya - I think about 600 customers consumers like 60% of power - these are big manufacturing and mining companies) - and rest of 6.5M consumers -consume very little.
I had rather someone aimed for 5,000MW and get 3,000 MW than aim for 3,000MW and get 2,000MW.
Besides the investment in power sector has been driven by private sector mostly....we need to copy that model over to roads (get toll & PP roads)
Lots of mathiness - conflation - hiding behind the forest of numbers. Expand this "Energy Demand" table 2005 to 2018. The Jubilee whirlwind connections are ghost meters - that never flipped the switch. Which backs my point in this thread - about voodoo growth unfelt on the ground - driven by misplaced oversupply of hard infra.
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Largely agreed - I don't mind if we were exporting maids to Saudi Arabia - but when we are exporting highly skilled workforce like nurses, doctors, engineers - then we are losing more than we are getting from the remittance. Remittance now is what 2.5B - from like 3m Kenyans out there - in GDP terms - it's like 2-3% - so it's very little cash.
What's your take on diaspora remittance - is it a worthwhile return? I see the brain drain as a big loss - cause the Green Card "lottery" is rigged to mop the best. China has her own Thousand Talents or something - that Trump's been whinging about.
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Of course I feel like a hypocrite being one of those - although my college & postgrad have all been US. Still I was hoping to hear what can be done? The US's biggest leverage is milking the cremé of global talent with E1 and Green Card. Basically if you're a certified genius you have an open visa anywhere. China is onto this with lots of sweeteners and almost outplaying the West.
How can Kenya stem the talent haemorrhage and attract top brains as well?
Largely agreed - I don't mind if we were exporting maids to Saudi Arabia - but when we are exporting highly skilled workforce like nurses, doctors, engineers - then we are losing more than we are getting from the remittance. Remittance now is what 2.5B - from like 3m Kenyans out there - in GDP terms - it's like 2-3% - so it's very little cash.
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Rotich flips more buggerbonds.
Kenya sells third Sh210bn Eurobond
Rotich says the money raised will be used to finance the budget and repay Sh75 billion 2014 Eurobond that is due to mature in June.
The growing deficit in the budget has left the government with fewer options to finance its ballooning expenditure and this has made borrowing one of its easiest ways to raise plug the hole.
https://mobile.nation.co.ke/business/Kenya-sells-third-Sh210bn-Eurobond/1950106-5117296-2foagy/index.html
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It not more - it's refinancing the old one.
Rotich flips more buggerbonds.
Kenya sells third Sh210bn Eurobond
Rotich says the money raised will be used to finance the budget and repay Sh75 billion 2014 Eurobond that is due to mature in June.
The growing deficit in the budget has left the government with fewer options to finance its ballooning expenditure and this has made borrowing one of its easiest ways to raise plug the hole.
https://mobile.nation.co.ke/business/Kenya-sells-third-Sh210bn-Eurobond/1950106-5117296-2foagy/index.html
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Pundit - here's GoK promoting the booming betting industry
Kenya to deport foreigners in betting
Dr Matiang'i said deportation orders will be issued to foreign investors who will be on the list forwarded to him by the Immigration.
https://mobile.nation.co.ke/news/State-to-deport-foreign-investors-in-betting/1950946-5123378-h0x09/index.html
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Pundit - here's GoK promoting the booming betting industry
Kenya to deport foreigners in betting
Dr Matiang'i said deportation orders will be issued to foreign investors who will be on the list forwarded to him by the Immigration.
https://mobile.nation.co.ke/news/State-to-deport-foreign-investors-in-betting/1950946-5123378-h0x09/index.html
Several factors just found Kenya ripe for mobile money. I think the average amount we push per subscriber is the highest in Africa. I got this from a magazine that tracks mobile money. I’ll get it. Mobile money is what drives gambling. Can’t think of anything else. That’s why Sportpesa will never thrive in any other market. So these tantrums at gambling are misinformed
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Pundit - here's GoK promoting the booming betting industry
Kenya to deport foreigners in betting
Dr Matiang'i said deportation orders will be issued to foreign investors who will be on the list forwarded to him by the Immigration.
https://mobile.nation.co.ke/news/State-to-deport-foreign-investors-in-betting/1950946-5123378-h0x09/index.html
Several factors just found Kenya ripe for mobile money. I think the average amount we push per subscriber is the highest in Africa. I got this from a magazine that tracks mobile money. I’ll get it. Mobile money is what drives gambling. Can’t think of anything else. That’s why Sportpesa will never thrive in any other market. So these tantrums at gambling are misinformed
It also means gambling is not an "industry" anymore than narcotics that Pundit can point out as evidence of growth outside the financial sector. We simply have a fake boom from sky-debt hard infra and the Fuliza, etc shylock vultures. The struggling low-income real estate with bursting slums shows real poverty. Folks need living wages. And who's better at creating jobs - GoK or the private sector? Then why mop the market of liquidity and starve SMEs to build rails to nowhere? This thread is about the hard infrastructure myth of voodoo growth.
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Sounds like Matianga and co are trying to steal Chinese and their betting machines. I don't think they can touch SportPesa - it's too big now for Matiangi.