Of course they are forex and interest rate risks but compared to what is happening now - 50 or 100yrs - 100B dollars loan take once is better than what we are doing.
Now kenya treasury is floating domestic infrastructure bonds at 13%. Our Eurobond are at 7%. The domestic bond is so profitable it's crowding out private lending and investment.
If we borrow 100B 50yr long-maturing bond at 6% - we would be paying around 6B (declining) every year with interest of 300M dollars - annually. That is about how much we pay now for all debts now.
With that 100B - our GDP will grow by 100 percent in 1-3 yrs during construction phase - gov will collect back about 20 percent of it as taxes - that is 20B - enough to pay off the loan for first 3yrs.
With 100B - we would have closed our infrastructure deficit - strictly invested in basic infrastructure- we will build 100,000Kms paved roads - that is almost paved road right to everyone front door, we will build 50 mega dams with irrigation, we will provide piped water to everyone, we will build expressways from Malaba to Mombasa - Namanga to Isiolo- we can turn all our major international roads into expressway, we will build road around lake victoria, we will extend the railway, basic sanitations, we build metros and light rail in our major cities.
Our infrastructure deficit is well studied - we need to spend almost 20 percent of GDP annually to fix it - in 10yrs - we can barely spend 5 percent - so we will require 50yrs to fix it.
We can do it now - enjoy now - from economic growth that will ensure - we can pay off principal plus interest next 5oyrs.
Then from there - we totally stop borrowing for development - because everywhere will have paved road, clean piped water, electricity- we just focus on repaying 6B annually - maintenance & operation- and rest of the money can be invested in the economy.
Without basic infrastructure our economic growth and welfare will remain constrained.
This is something you need to fix once and for all - US is not building new railways or expressways or metros or dams - you build it once - it last 50-200yrs!
When Moi built Ndakaini in 1990s - 30yrs later - it still standing and will stand for another 100yrs plus. US electrified in 1930s - it has not needed to re-invest again - it just usual ORM. Built their expressways in 1950s - it has not needed to build one the last 50yrs if I am not wrong.
We need to do these basic infrastructure Now and Forget about them. There is enough money out there. We just need to borrow. Billions of money in pension funds that will not be required until 50yrs are begging to be borrowed...so they can beat inflation.
Many life insurance taken and premiums paid now - when people will die 70yrs later - this is money crying to be borrowed. Isnt it better if a country took that money - than it was invested in private company - with majority unlikely to last 20yrs?
That is your fake spin. Here is the real story
Topic: Ndidi before he became Mp - the future of kikuyu nation is here (Read 2590 times)