World Bank pours cold water on Kenya’s war against poverty

[Kadudu]

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Pundit, can you explain this? It pours very cold water on your theory Kenya will be a middle income country by 2030. It is 12 years to go!

At least 16 million Kenyans could still be wallowing in poverty in the next 12 years

https://www.nation.co.ke/business/World-Bank-pours-cold-water-on-Kenya-s-war-against-poverty/996-4388912-drt2u4/index.html

[RV Pundit]

I agree with WB - but I don't know who told them poverty will be dealt with in 12yrs?. You see Kenya just reduced poverty from 45% to 35% in 10yrs - so another 10yrs - we can make that to 25% - with 75% living above the poverty rate - so by 2030 - we will be around 20% poor people - and 80% will be okay - and that to me is  middle-income. We are already lower middle income. It is in 2050 when I think we would have made poverty history in kenya - I expect our per capita to be around 10,000Usd in 2010 - that would be newly developed country!

Pundit, can you explain this? It pours very cold water on your theory Kenya will be a middle income country by 2030. It is 12 years to go!

At least 16 million Kenyans could still be wallowing in poverty in the next 12 years

https://www.nation.co.ke/business/World-Bank-pours-cold-water-on-Kenya-s-war-against-poverty/996-4388912-drt2u4/index.html

Pundit, can you explain this? It pours very cold water on your theory Kenya will be a middle income country by 2030. It is 12 years to go!

At least 16 million Kenyans could still be wallowing in poverty in the next 12 years

https://www.nation.co.ke/business/World-Bank-pours-cold-water-on-Kenya-s-war-against-poverty/996-4388912-drt2u4/index.html

[RVtitem]

Uhuru trickle down, pro-tumbocrat economics debunked again.

[hk]

pundit,

This is the reason why economic growth of 5.6% isn't being felt by the kawaida mwananchi https://www.businessdailyafrica.com/news/Public-investments-top-economic-growth-driver/539546-4390920-131euivz/index.html . Until the private sector comes to the table the breadth of the growth will be limited.

[RV Pundit]

Uhuru has done well - you can check where we are now and 10yrs - regarding energy (electrification) - and it's impressive.
https://www.businessdailyafrica.com/datahub/Busia--Homa-Bay--Siaya-stuck-with-kerosene-lamps/3815418-4388538-k4rp0bz/index.html

Uhuru trickle down, pro-tumbocrat economics debunked again.

[RV Pundit]

I disagree - both private and public investment need to accelerate - I don't know what cue the private sector is waiting for - but definitely the public sector is finally turning the corner! Private sector just need to get their act together - the roads are better, there is more electricity, there are railways, more kenyans - what is squeezing the private sector esp maybe the interest rate capping.

Public sector is growing by tapping into cheap chinese and external loans. Private sector can do well if they similar tap into cheap foreign debt market - rather than chasing the few kshs in our banks.

pundit,

This is the reason why economic growth of 5.6% isn't being felt by the kawaida mwananchi https://www.businessdailyafrica.com/news/Public-investments-top-economic-growth-driver/539546-4390920-131euivz/index.html . Until the private sector comes to the table the breadth of the growth will be limited.

[hk]

I disagree - both private and public investment need to accelerate - I don't know what cue the private sector is waiting for - but definitely the public sector is finally turning the corner! Private sector just need to get their act together - the roads are better, there is more electricity, there are railways, more kenyans - what is squeezing the private sector esp maybe the interest rate capping.

Public sector is growing by tapping into cheap chinese and external loans. Private sector can do well if they similar tap into cheap foreign debt market - rather than chasing the few kshs in our banks.

The near universal electricity connection has brought users who are being subsidized by more healed customers driving the price of electricity higher. Removal of capping of interest rates wont necessarily drive more credit growth because government is borrowing heavily locally. Why would a bank extend a loan to a risky private customer instead of just buying the treasury bills? There are very few companies in kenya that have access to external borrowing and the bulk of it is coming from IFC. The drivers of the economy SMEs don't have access to cheaper international credit.  The private sector is looking for cheaper credit and full liberalization of economy to induce innovation that can disrupt various sectors.

[RV Pundit]

Looking at electricity - I don't see any huge spike - https://stima.regulusweb.com/ - and yeah at average of 20 cents per usd - we are doing badly compared to say Ethiopia who are paying 6 cents - although it subsidized.  The price may be a little higher but it's far more stable nowadays - which is great!. I agree on rate caps and need for gov to stop crowding private sector by aggresively borrowing locally - and look elsewhere - china, IDBs, and EuroBond.To be honest I really don't understand what you mean by "fully liberalized" - to me they are very few sectors that are still monopolized by GoK. And really as we approach 30 billion usd budget - you'd think a lot of that money will end up in SMEs.

What is ailing our private sector? I think the lack of imagination beyond buying plots and building flats - and farming quail birds & green houses. We need to go big in manufacturing - small cottages - now that electricity is all over - we can add real value and unfortunately for many Africans - they have no role models or mentors to see this as a viable option to sink their money.Folks really need to start using all these electricity that has been supplied - beyond watching 9pm News! - Farming & Manufacturing are some of the lowest hanging fruit that can benefit from cheap machinery!

The near universal electricity connection has brought users who are being subsidized by more healed customers driving the price of electricity higher. Removal of capping of interest rates wont necessarily drive more credit growth because government is borrowing heavily locally. Why would a bank extend a loan to a risky private customer instead of just buying the treasury bills? There are very few companies in kenya that have access to external borrowing and the bulk of it is coming from IFC. The drivers of the economy SMEs don't have access to cheaper international credit.  The private sector is looking for cheaper credit and full liberalization of economy to induce innovation that can disrupt various sectors.

[gout]

27% increase in cost of electricity is huge given Jubilee came promising reduced cost of power. Small bakeries, welding and such cottage industries greatest cost is electricity - it is just crazy. The night tariff things have gone cold - no word from KP to the factories on how it was supposed to work. This has become common with most workable and commonsense ideas being suggested by Jubilee- No follow up just empty words.  With prepaid meters I still don't understand why fixed monthly charges has risen from 96 to 150. KP had indicated the prepaid meters will see these fixed charge gone now that they won't need meter readers. For village folks using two bulbs for 3 hours a night, I foresee a huge problem when the tokens run for several months and they have to first pay these fixed charges first before getting any token.  Following Apollo Mboya's on twitter and cries from Kenyans the company/power sector is just another criminal establishment.

Looking at electricity - I don't see any huge spike - https://stima.regulusweb.com/ - and yeah at average of 20 cents per usd - we are doing badly compared to say Ethiopia who are paying 6 cents - although it subsidized.  The price may be a little higher but it's far more stable nowadays - which is great!.

[/quote]

[RV Pundit]

Interesting report from CBK on interest capping.
https://www.centralbank.go.ke/wp-content/uploads/2018/03/Interest-Rate-Caps_-March-2018final.pdf

[RV Pundit]

I can't fault Jubilee focus on access - universal electrification - first - and cost later. I think that is the way to go - make sure we've made all upfront investment required to ensure everyone has universal access - right now we are about half way through (6M connected out of 12M household dwellings - althougly only 4M are active). That is nothing to sneer about because five yrs ago the number was about 1m customers only. I think Jubilee should continue to focus achieving universal coverage...some places like Kiambu, Nairobi, Mombasa and Kajiado - are probably nearly there - about 70-80% - but we have places like western kenya, nyanza & most of the north - where only 10% of household have electricity - this is where huge investment is required - to build the supply side.

Now when it come to cheap power - we either do HYDRO or COAL (cost 3 cents) - there is no short cut. Cost of production for wind and geothermal where all investments is now happening is 9 -11 cent - so basically at best KPLC can sell to us is maybe 14-15 cents?

We just need to ignore the environmentalist and go big time COAL. We don't have any hydro potential to talk about - and when like last year we experience some drought - then we get into big problems. But first there is no reason why 10% of Bomet or Siaya or Busia or Bungoma or Kakamega have electricity - that need to be dealt with - before we worry about an extra 90 bob every household will pay.

27% increase in cost of electricity is huge given Jubilee came promising reduced cost of power. Small bakeries, welding and such cottage industries greatest cost is electricity - it is just crazy. The night tariff things have gone cold - no word from KP to the factories on how it was supposed to work. This has become common with most workable and commonsense ideas being suggested by Jubilee- No follow up just empty words.  With prepaid meters I still don't understand why fixed monthly charges has risen from 96 to 150. KP had indicated the prepaid meters will see these fixed charge gone now that they won't need meter readers. For village folks using two bulbs for 3 hours a night, I foresee a huge problem when the tokens run for several months and they have to first pay these fixed charges first before getting any token.  Following Apollo Mboya's on twitter and cries from Kenyans the company/power sector is just another criminal establishment.