Kenya’s debt ceiling is set to cross Sh9 trillion, new target 12 trillion

[Arcadian_Dreamer]

You're using developed world - who are already on the diminishing marginal economic utility territory.
I am talking kenya with staggering infrastructure deficit.
If we borrow and invested to fix that deficit - we would have killed many birds with one stones - economy will grow during construction, and even faster after.
The infrastructure deficit - we have doesn't requires us to 'generate' demand for it.
All we need to do is avoid short term debt like Uhuru is now contracting to run gov operations!
We need to borrow 100yr long tenure loans - linked to infrastructure
If we borrowed 100B - spread over 50yrs - and invested it to fix our deficit (pave all dirt road, supply clean piped water to everyone, electricity to everyone, sewage systems, railways) - we would effectively have borrowed 2B per annum

The issue should be who is willing to give us a centenary bond? How can we securitize such a loan? Maybe we can give them all minerals rights?

Another option is to use the infrastructure as security - for example SGR - or allow the borrowers to toll the roads?

Whatever we do - we need to invest in our public infrastructure.

Yes investing in unproductive projects results initially in a boom, as long as construction is ongoing, followed by a bust, when forecasted benefits fail to materialize and projects become a drag on the economy ( hello SGR). Where investments are debt-financed, overinvesting in unproductive projects results in the build-up of debt, monetary expansion, instability in financial markets, and economic fragility, exactly as we see in Kenya today. Economic reality applies to developed and developing countries alike.

You subscribe to the erroneous Keynesian multiplier theory. You believe infrastructure investment induces growth, regardless of its true economic and social profitability. The road to hell is paved with good intentions.

[RV Pundit]

For me gov job goes beyond the economics..lack of basic infrastructure is denial of almost third generation human rights..if SGR saves life with less accidents it already a success..and SGR we are not think now but 50yrs..and this railway will outlast us.When is last time US laid new rail..these things you do once and forget..so a little sacrifice is expected for future generations.Future generation will be maintaining as they focus on your trickle down economic mumbi jumbo.The roads built by USSR still serves Russia. Hitler infrastructure the same.US expressway were built 70yrs ago.Argentina has gone bust but is still a developed world. DON'T APPLY FIRST WORLD IDEAS ON THIRD WORLD. THIS WHY MOST LUOS ARE VERY POOR. BUY LAND AND BUILD A NICE HOUSE...FIRST.THIS WILL PROBABLY GENERATE ZERO RETURNS FOR 15YRS BUT EVENTUALLY IT BECOMES FOUNDATION OF YOUR FAMILY AND WEALTH.

[Kadudu]

So why are most Kalejins still poor like the Luos?
Btw, I have never heard of food donations going to Luo Nyanza as is the case every other day in Baringo and parts of Kerio Valley.

Investing in infrastructure is very good especially for jobs creation, but taking for granted most of the materials being used for construction are made in the country and a lot of the knowhow in production remains in the country. Now in the case of SGR most of the jobs in production were made in China. Today even the trains are still being driven by Chinese personel. We do not need to talk of any knowhow. Kenya cannot even lay one km of railway.

For me gov job goes beyond the economics..lack of basic infrastructure is denial of almost third generation human rights..if SGR saves life with less accidents it already a success..and SGR we are not think now but 50yrs..and this railway will outlast us.When is last time US laid new rail..these things you do once and forget..so a little sacrifice is expected for future generations.Future generation will be maintaining as they focus on your trickle down economic mumbi jumbo.The roads built by USSR still serves Russia. Hitler infrastructure the same.US expressway were built 70yrs ago.Argentina has gone bust but is still a developed world. DON'T APPLY FIRST WORLD IDEAS ON THIRD WORLD. THIS WHY MOST LUOS ARE VERY POOR. BUY LAND AND BUILD A NICE HOUSE...FIRST.THIS WILL PROBABLY GENERATE ZERO RETURNS FOR 15YRS BUT EVENTUALLY IT BECOMES FOUNDATION OF YOUR FAMILY AND WEALTH.

[Arcadian_Dreamer]

For me gov job goes beyond the economics..lack of basic infrastructure is denial of almost third generation human rights..if SGR saves life with less accidents it already a success..and SGR we are not think now but 50yrs..and this railway will outlast us.When is last time US laid new rail..these things you do once and forget..so a little sacrifice is expected for future generations.Future generation will be maintaining as they focus on your trickle down economic mumbi jumbo.The roads built by USSR still serves Russia. Hitler infrastructure the same.US expressway were built 70yrs ago.Argentina has gone bust but is still a developed world. DON'T APPLY FIRST WORLD IDEAS ON THIRD WORLD. THIS WHY MOST LUOS ARE VERY POOR. BUY LAND AND BUILD A NICE HOUSE...FIRST.THIS WILL PROBABLY GENERATE ZERO RETURNS FOR 15YRS BUT EVENTUALLY IT BECOMES FOUNDATION OF YOUR FAMILY AND WEALTH.

Serikali saidia mentality in a nutshell. As I said the road to serfdom is paved with good intentions. It was all so good during the Kifaki presidency, now we are in debt bondage thanks to unbridled borrowing.

SGR saving lives nonsense is so ridiculous it is not even funny, more lives have been lost as a result of government not paying doctors because they are broke having squandered the national wealth on Chinese boondoggles.

The fact that the Colonial built railways stayed disused for so long is a harbinger for the eventual fate of the SGR, it will be mothballed and every one will be back to using the roads. What good did the old railways do for us?

American rail roads were built by private companies.

The greatest thing we can bequeath to our children is a solvent nation, unsaddled with debts and a balanced budget.

You are under the erroneous impression that Hitler was this great builder  he wasn't. Mussolini is what you have in mind. USSR only left behind decaying nuclear plants that cost gazillions to decommission.

Don't be lazy Pundit and resort to crude tribal jabs  when you run of out ideas, do better.

 

[RV Pundit]

Old railway gave us Nairobi and nearly all the other towns save for a few.
The premise on focusing on infrastructure is clear - it's built once and use for many years kind of project.
It public investment - that will last generations.
Once you have built a rail or major road - you only need to maintain it - going forward.
What hails kenya and Africa - is lack of basic infrastructure.
This is both a problem and an opportunity.
Of 2.5m people living in Nairobi slums - there is an opportunity to construct nearly 1M people - and employ the same 2m people during construction.
Our paved road network is still rickety - just maybe 20% of classified roads - and possibly 10% of all roads - while most developed nations have close to 100%.
Electricity access is now largely sorted - save for many patches here and there.
Telecommunication is now also largely sorted. Financial access sorted.
Water is still a problem. And so is sewage.

Once those things are sorted - gov can now step back into maintenance mode  - and go lean (less taxes) - and let the private sector magic work.

I have lost hope on Uhuru seriously focusing on this - but I know Ruto will fix these issues - in a grand scale.

[RV Pundit]

Some exaggeration there - only about 1,000 of 30,000 who worked on SGR where Chinese. These is a lot of know-how transfer. That is why now old MGR are been rehabilitated by kenyans. We have kenya railway college working with chinese to train next operators.

It would be nice to have kenyans fully on board - but it no biggie if we get a few chinese top engineers to build us world class infrastructure - and avoid trial-error mistakes.

So why are most Kalejins still poor like the Luos?
Btw, I have never heard of food donations going to Luo Nyanza as is the case every other day in Baringo and parts of Kerio Valley.

Investing in infrastructure is very good especially for jobs creation, but taking for granted most of the materials being used for construction are made in the country and a lot of the knowhow in production remains in the country. Now in the case of SGR most of the jobs in production were made in China. Today even the trains are still being driven by Chinese personel. We do not need to talk of any knowhow. Kenya cannot even lay one km of railway.

For me gov job goes beyond the economics..lack of basic infrastructure is denial of almost third generation human rights..if SGR saves life with less accidents it already a success..and SGR we are not think now but 50yrs..and this railway will outlast us.When is last time US laid new rail..these things you do once and forget..so a little sacrifice is expected for future generations.Future generation will be maintaining as they focus on your trickle down economic mumbi jumbo.The roads built by USSR still serves Russia. Hitler infrastructure the same.US expressway were built 70yrs ago.Argentina has gone bust but is still a developed world. DON'T APPLY FIRST WORLD IDEAS ON THIRD WORLD. THIS WHY MOST LUOS ARE VERY POOR. BUY LAND AND BUILD A NICE HOUSE...FIRST.THIS WILL PROBABLY GENERATE ZERO RETURNS FOR 15YRS BUT EVENTUALLY IT BECOMES FOUNDATION OF YOUR FAMILY AND WEALTH.

[audacityofhope]

If you are going to debate with me, you will do well not to justify your argument with half-baked data. When did the handshake occur? You want to blame an event that took place in March 2018? Fuzzy logic doesn't work on Veritas blog.
I will give you a link, just in case you prefer not to face the full facts, thee full story goes like this: In all of 50 years, Kenya was independent, its public debt barely got to 1.8 Trillion. Then who comes along? Just 5 years (first term) later, Jumbiree more than doubled that figure! - 2017)  past the 3.6 to the 3.8 Trillion which is the only figure you want to use in your argument. The reckless borrowing spree did not stop in 2017, in just months (12 months to be exact -  aka March 2018) aka 'handshake rule' (your phrase not mine) sone more 1.2 Trillion gets added as debt gallops to 5 Trillion! These are the facts and here is the Central Bank link to back it up...

https://www.centralbank.go.ke/public-debt/

Now that the public debt has maintained the same tempo approaching another debt ceiling they set, your want to blame someone who isn't in government? Maajabu haya.
Who is clinging to straws again??

Stop clinging on straws , we are talking of the debt here, Fact remains that by 2017 Kenyas Debt was around 3.8 Trillion and we could see tangible results in all corners from Roads, SGR, Rural electrification free maternity etc of Kenya yes the 10%  was in play,  now how do you explain 3 years later under handshake rule under Uhuru and Raila with no tangible results the debt has more or less doubled to 8 Trillion now they even want to push it beyond the capped 9 Trillion.

Money meant for a nation never reaches our shores save a trickle in the form of weekly church donations and private development(s) and you are here typing nonsense like you are the only educated fool on this blog who hasn't a clue as to which duo helped themselves to the Eurobond... 

UhuRuto perfomed well in the first term they would have perfomed better in the second government , once Uhuru threw out Ruto and brought Raila into government things went to the south. Priorty was given to Bbi instead of development and other projects

Although I do not believe in BBI, I do not see it as Kenya's main problem. Kenya's problem is a basic national one and more deep than just BBI goes. In fact Raila made the biggest mistake to go for the handshake with Uhuru. He should have left the ruling clueless duo to fry in their own fat. Uhuru and Ruto should have never been any where near the presidency.
Giving 35% of the revenue to the counties does not make sense as revenue allocation goes with responsibilities. So what will be devolved to fit in the extra 20% to the counties?

Kenya is in Big problems, then you have Uhuru and araila telling us BBI is the solution to this mess. Where as BBI roots for devolvi g 35%  of Kenyas revenue and the whole process will cost Kenya around 40 B.

[RV Pundit]

It's Raila who has willingly become gov chief apologist otherwise Uhuru is to blame - with his handshake brother - for 2nd term mess.

If you are going to debate with me, you will do well not to justify your argument with half-baked data. When did the handshake occur? You want to blame an event that took place in March 2018? Fuzzy logic doesn't work on Veritas blog.
I will give you a link, just in case you prefer not to face the full facts, thee full story goes like this: In all of 50 years, Kenya was independent, its public debt barely got to 1.8 Trillion. Then who comes along? Just 5 years (first term) later, Jumbiree more than doubled that figure! - 2017)  past the 3.6 to the 3.8 Trillion which is the only figure you want to use in your argument. The reckless borrowing spree did not stop in 2017, in just months (12 months to be exact -  aka March 2018) aka 'handshake rule' (your phrase not mine) sone more 1.2 Trillion gets added as debt gallops to 5 Trillion! These are the facts and here is the Central Bank link to back it up...

https://www.centralbank.go.ke/public-debt/

Now that the public debt has maintained the same tempo approaching another debt ceiling they set, your want to blame someone who isn't in government? Maajabu haya.
Who is clinging to straws again??

Stop clinging on straws , we are talking of the debt here, Fact remains that by 2017 Kenyas Debt was around 3.8 Trillion and we could see tangible results in all corners from Roads, SGR, Rural electrification free maternity etc of Kenya yes the 10%  was in play,  now how do you explain 3 years later under handshake rule under Uhuru and Raila with no tangible results the debt has more or less doubled to 8 Trillion now they even want to push it beyond the capped 9 Trillion.

Money meant for a nation never reaches our shores save a trickle in the form of weekly church donations and private development(s) and you are here typing nonsense like you are the only educated fool on this blog who hasn't a clue as to which duo helped themselves to the Eurobond... 

UhuRuto perfomed well in the first term they would have perfomed better in the second government , once Uhuru threw out Ruto and brought Raila into government things went to the south. Priorty was given to Bbi instead of development and other projects

Although I do not believe in BBI, I do not see it as Kenya's main problem. Kenya's problem is a basic national one and more deep than just BBI goes. In fact Raila made the biggest mistake to go for the handshake with Uhuru. He should have left the ruling clueless duo to fry in their own fat. Uhuru and Ruto should have never been any where near the presidency.
Giving 35% of the revenue to the counties does not make sense as revenue allocation goes with responsibilities. So what will be devolved to fit in the extra 20% to the counties?

Kenya is in Big problems, then you have Uhuru and araila telling us BBI is the solution to this mess. Where as BBI roots for devolvi g 35%  of Kenyas revenue and the whole process will cost Kenya around 40 B.

[Nowayhaha]

Its evident you agree with me that post Kibakis era of 1.8 Trillion in debt it rose to 3.8 by 2017 and you could see tangible development results. From 3.8 in 2017 to 8.4 Trillion by end of 2020 in Handshake regime without ang tangible results.
Fact is Ruto was elbowed out from the 2nd term with Raila taking his position , Government officials used to consult Raila and not Ruto. When Uhuru went to ask for more debt in China he tagged along with Raila and not Ruto is that correct or this "unbaked "fact?

If you are going to debate with me, you will do well not to justify your argument with half-baked data. When did the handshake occur? You want to blame an event that took place in March 2018? Fuzzy logic doesn't work on Veritas blog.
I will give you a link, just in case you prefer not to face the full facts, thee full story goes like this: In all of 50 years, Kenya was independent, its public debt barely got to 1.8 Trillion. Then who comes along? Just 5 years (first term) later, Jumbiree more than doubled that figure! - 2017)  past the 3.6 to the 3.8 Trillion which is the only figure you want to use in your argument. The reckless borrowing spree did not stop in 2017, in just months (12 months to be exact -  aka March 2018) aka 'handshake rule' (your phrase not mine) sone more 1.2 Trillion gets added as debt gallops to 5 Trillion! These are the facts and here is the Central Bank link to back it up...

https://www.centralbank.go.ke/public-debt/

Now that the public debt has maintained the same tempo approaching another debt ceiling they set, your want to blame someone who isn't in government? Maajabu haya.
Who is clinging to straws again??

Stop clinging on straws , we are talking of the debt here, Fact remains that by 2017 Kenyas Debt was around 3.8 Trillion and we could see tangible results in all corners from Roads, SGR, Rural electrification free maternity etc of Kenya yes the 10%  was in play,  now how do you explain 3 years later under handshake rule under Uhuru and Raila with no tangible results the debt has more or less doubled to 8 Trillion now they even want to push it beyond the capped 9 Trillion.

Money meant for a nation never reaches our shores save a trickle in the form of weekly church donations and private development(s) and you are here typing nonsense like you are the only educated fool on this blog who hasn't a clue as to which duo helped themselves to the Eurobond... 

UhuRuto perfomed well in the first term they would have perfomed better in the second government , once Uhuru threw out Ruto and brought Raila into government things went to the south. Priorty was given to Bbi instead of development and other projects

Although I do not believe in BBI, I do not see it as Kenya's main problem. Kenya's problem is a basic national one and more deep than just BBI goes. In fact Raila made the biggest mistake to go for the handshake with Uhuru. He should have left the ruling clueless duo to fry in their own fat. Uhuru and Ruto should have never been any where near the presidency.
Giving 35% of the revenue to the counties does not make sense as revenue allocation goes with responsibilities. So what will be devolved to fit in the extra 20% to the counties?

Kenya is in Big problems, then you have Uhuru and araila telling us BBI is the solution to this mess. Where as BBI roots for devolvi g 35%  of Kenyas revenue and the whole process will cost Kenya around 40 B.

[Nowayhaha]

Remember Martha Karua saying Raila articulates the Government policy better than Uhuru himself.

It's Raila who has willingly become gov chief apologist otherwise Uhuru is to blame - with his handshake brother - for 2nd term mess.

If you are going to debate with me, you will do well not to justify your argument with half-baked data. When did the handshake occur? You want to blame an event that took place in March 2018? Fuzzy logic doesn't work on Veritas blog.
I will give you a link, just in case you prefer not to face the full facts, thee full story goes like this: In all of 50 years, Kenya was independent, its public debt barely got to 1.8 Trillion. Then who comes along? Just 5 years (first term) later, Jumbiree more than doubled that figure! - 2017)  past the 3.6 to the 3.8 Trillion which is the only figure you want to use in your argument. The reckless borrowing spree did not stop in 2017, in just months (12 months to be exact -  aka March 2018) aka 'handshake rule' (your phrase not mine) sone more 1.2 Trillion gets added as debt gallops to 5 Trillion! These are the facts and here is the Central Bank link to back it up...

https://www.centralbank.go.ke/public-debt/

Now that the public debt has maintained the same tempo approaching another debt ceiling they set, your want to blame someone who isn't in government? Maajabu haya.
Who is clinging to straws again??

Stop clinging on straws , we are talking of the debt here, Fact remains that by 2017 Kenyas Debt was around 3.8 Trillion and we could see tangible results in all corners from Roads, SGR, Rural electrification free maternity etc of Kenya yes the 10%  was in play,  now how do you explain 3 years later under handshake rule under Uhuru and Raila with no tangible results the debt has more or less doubled to 8 Trillion now they even want to push it beyond the capped 9 Trillion.

Money meant for a nation never reaches our shores save a trickle in the form of weekly church donations and private development(s) and you are here typing nonsense like you are the only educated fool on this blog who hasn't a clue as to which duo helped themselves to the Eurobond... 

UhuRuto perfomed well in the first term they would have perfomed better in the second government , once Uhuru threw out Ruto and brought Raila into government things went to the south. Priorty was given to Bbi instead of development and other projects

Although I do not believe in BBI, I do not see it as Kenya's main problem. Kenya's problem is a basic national one and more deep than just BBI goes. In fact Raila made the biggest mistake to go for the handshake with Uhuru. He should have left the ruling clueless duo to fry in their own fat. Uhuru and Ruto should have never been any where near the presidency.
Giving 35% of the revenue to the counties does not make sense as revenue allocation goes with responsibilities. So what will be devolved to fit in the extra 20% to the counties?

Kenya is in Big problems, then you have Uhuru and araila telling us BBI is the solution to this mess. Where as BBI roots for devolvi g 35%  of Kenyas revenue and the whole process will cost Kenya around 40 B.

[RV Pundit]

FACTs - Jubilee 2.0 is handshake/BBI - a disaster.

Its evident you agree with me that post Kibakis era of 1.8 Trillion in debt it rose to 3.8 by 2017 and you could see tangible development results. From 3.8 in 2017 to 8.4 Trillion by end of 2020 in Handshake regime without ang tangible results.
Fact is Ruto was elbowed out from the 2nd term with Raila taking his position , Government officials used to consult Raila and not Ruto. When Uhuru went to ask for more debt in China he tagged along with Raila and not Ruto is that correct or this "unbaked "fact?

[Njuri Ncheke]

Even though I do not support Pundit economic miracle mode on going full gaga infrastructure, I agree Raira is to blame for second term mess that has seen debt rise almost twice our GDP. who can blame Ruto for this? It clear he hasn't been in government and all other assessments are just speculation.
Raira doesn't understand econimics and thats one reason we mountain people are against him, his populist ideas are socialist and a risk to economy.
Ruto too wouldn't be really spectacular but at least he is way above baba, Ruto mostly model would be along pundit line. To be honest Kikuyus are superb when it comes to economy, they are very diverse, Ruto would better have enough mountain people for an economy strategy and give them  enough space to do it, all sectors would improve agriculture, tourism, manufacturing. Uhuru has great ideas but his execution methods and people he surrounded himself with have made him fail terribly

[RV Pundit]

Kenya's Kikuyu model (kibaki) is mediocre standards. Ethiopia grew at double digit from 2004 until recently - churning on average 11% growth. How did Ethiopia do this - public investment - I mean investing huge part in infrastructure - by building roads, rails, dams, name it. While we are complaining about 600kms of rail - Ethiopia were building maybe 5 times more - and yet are poorer.

I believe under Ruto we may see a double digit growth. It very easy to do this.

1) Agriculture  - mega irrigation schemes - this our golden goose - we need to improve productivity and production - by bringing million more acres of land -Ruto would focus on the coast - and flood it with sugar cane (it's humid and sugar cane can mature in less than a year), maize, cereals. Convert the existing RV/Central into high value crops - horticulture. We also need serious intervention on livestock. We are now importing 1B plus dollars of food - maize- etc - this is money we can save.

All the way from Garissa to Tana river to Lamu - there is huge scope to irrigate thousands of land - and alter the food production of the country.

This will not cost a lot of money - just the political will to listen to coastal leaders - come up with a win-win - Tana river water is getting wasted into Indian Ocean.

2) Road Construction binge like no other. If I was Ruto I would build 100kms in every const in 5yrs - which come to merely 20kms per year. That will be 30,000kms new paved roads.This will create a lot of jobs, open up rural economy and also improve agricultural productivity.

A km of these low volume road is about 0.5m dollars on the very high side - so we are talking 3,000m dollars or just 3B dollars.

 Heck we can sell Kenya gov shares in Safaricom - and sink it into Rural Road fund - and do even 60,000kms of road. Safaricom right now is worth 13B - gov owns 35% of it - that is nearly 5B dollars.

This will open up rural kenya - and will make Ruto unbeatable in 2027.

Also fund KURA to build roads all over Nairobi, Mombasa and such metros.

KENHA roads (Major Highways) should be concessioned out for PPP like Mombasa road now - those have enough traffic to be tolled - we don't need to spend anything - like we did with power generation. It question of staying in jams or pay toll to drive in smooth private road.

We should eradicate dirt road - before we do anything else.

3) Go into housing construction binge - In Nairobi build 0.5M units - and in every county - build maybe 20,000 units - total of 1m units. This can largely self-finance - the gov just need to provide mortgage guarantees - to private developers - not kenya kamikaze - but top 50 chinese contructors. This will not only transform Nairobi but also the 46 other towns into mini cities.

4) The last jig saw in Kenya is water - provide clean enough water - otherwise electricity and telecommunication is largely sorted. I think if we build one mega dam per county or two - that will supply water to everyone - we would have solved this problem. The soft issues of doing business (financial access, bla bla) has been sorted

5) Railways - complete SGR to Malaba-Kampala. Complete Lapsset. Build metro line in Nairobi. This require heavy borrowing - but it's justified - railways will last maybe two centuries.

 6) Manufacturing -Finally invite Chinese to build industrial parks - like EPZ - we should only care about the jobs - for youths - and suspend anything else in those EPZ - zero taxes as long as you're export oriented and can employ thousands of people. There is a small opportunity during demographic transition to use the excess labour - and if we are not careful we will miss it. Mass employment will be possible in Athi River like EPZs. Built them anyway


And watch the economy grow by double digit - without much borrowing.

Even though I do not support Pundit economic miracle mode on going full gaga infrastructure, I agree Raira is to blame for second term mess that has seen debt rise almost twice our GDP. who can blame Ruto for this? It clear he hasn't been in government and all other assessments are just speculation.
Raira doesn't understand econimics and thats one reason we mountain people are against him, his populist ideas are socialist and a risk to economy.
Ruto too wouldn't be really spectacular but at least he is way above baba, Ruto mostly model would be along pundit line. To be honest Kikuyus are superb when it comes to economy, they are very diverse, Ruto would better have enough mountain people for an economy strategy and give them  enough space to do it, all sectors would improve agriculture, tourism, manufacturing. Uhuru has great ideas but his execution methods and people he surrounded himself with have made him fail terribly