Ruto - Form the damn commission of inquiry now to investigate handshake regime

[Kadudu]

Empty talk came from your idol while he was campaigning. What did he promise to cut on the budget the time he was campaigning? Let us first start there.
Why is he inflating the size of government instead of deflating it? He has increased the budget for entertainment at SH a threefold. What signs is he sending to the citizens of Kenya? Charity begins at home.

What can we cut? We already havent paid tenderprenuers 600B KES?

Go through gov budget - show me where 400B cuts will be got - that will plug 2B dollars 2015 eurobond principal payment.

This is example of empty talk.

[hk]

What can we cut? We already havent paid tenderprenuers 600B KES?

Go through gov budget - show me where 400B cuts will be got - that will plug 2B dollars 2015 eurobond principal payment.

This is example of empty talk.

State is captured by people close or within the government. KK if they were serious about state capture, they'd have dismantled tools of state capture i.e regulatory and policy formulation. Instead everything is intact so that its captured by the new elites, case in point is KNTC.
KK regime had a golden opportunity to cut spending to stabilize macros, the spending cuts would have been painful especially to tenderprenurs and other leeches. But within 6 months capital would have started flowing to the private sector spurring economic growth. Now 6 months down the road government is borrowing at 12% short term and 16% long term and rising. Populist initiatives like hustler funds are hemorrhaging money with little benefit to overall economy.
In a nutshell kk regime problem isn't opposition, its the economy.

Every ministry can withstand more than 10% cut, start with discretionally spending. Treasury should have cut several budget line items in each ministry and government institutions but that means spending serious political capital.  The 600b tenderprenurs debt shouldn't be a priority, its not the economic albatross that suppliers and government purports it to be.
Plus government doesnt have to cut $2b in an year, the cuts are for easing burrowing rate to get fiscal breathing room. That is suppose to ease market fears so that interest rates don't skyrocket.
Bottomline kk regime decided to raise taxes instead of cutting spending.

[gout]

We are borrowing from NCBA at 16%. The state capture commission is foregone.

It is now a matter of how lucky long the abused economy can continue before we default on local and global bankers and recently acquired oil dealers.

With demos taking a life away from baba and rains seemingly failing in some areas or El Nino wreaking havoc, 2024 will implode.

With a collapse the cuts will be deep wacha saa hii tunaexpand expenditure.

What was the use of retaining CBC confusion with no teachers. Going back to 8-4-4 would have saved the billions being added to TSC payroll.

[Georgesoros]

You hit the head on the nail.

State is captured by people close or within the government. KK if they were serious about state capture, they'd have dismantled tools of state capture i.e regulatory and policy formulation. Instead everything is intact so that its captured by the new elites, case in point is KNTC.
KK regime had a golden opportunity to cut spending to stabilize macros, the spending cuts would have been painful especially to tenderprenurs and other leeches. But within 6 months capital would have started flowing to the private sector spurring economic growth. Now 6 months down the road government is borrowing at 12% short term and 16% long term and rising. Populist initiatives like hustler funds are hemorrhaging money with little benefit to overall economy.
In a nutshell kk regime problem isn't opposition, its the economy.

Yap. At some point the extra fat must go, otherwise the country will need extensive reorganization.

[hk]

We are borrowing from NCBA at 16%. The state capture commission is foregone.

It is now a matter of how lucky long the abused economy can continue before we default on local and global bankers and recently acquired oil dealers.

With demos taking a life away from baba and rains seemingly failing in some areas or El Nino wreaking havoc, 2024 will implode.

With a collapse the cuts will be deep wacha saa hii tunaexpand expenditure.

What was the use of retaining CBC confusion with no teachers. Going back to 8-4-4 would have saved the billions being added to TSC payroll.

Not to digress, Equity bank is being coerced(forced)  to buy maturing euro bond to the tune of 70b or $500m. KCB is almost maxed out, the only other bank with enough capital to buy substantial euros is NCBA. Gachora is ready with about 42b or $300m, Guess who's now on the driver seat?

[sema]

Equity bank is being coerced(forced)  to buy maturing euro bond to the tune of 70b or $500m

And the purpose of this is what?

Is this economic crisis worse than what the country faced in the 90's when the economy all but collapsed?

[hk]

To buy

maturing euro bonds.

[RV Pundit]

HK you're talking in general - but again - symbolic 10% cut in every ministry? Ruto attempted to cut 300B last year - found no headway - because discretionary spending -aka development budget is just suggestion.

You literally need to retrench people, cut education spending, health care - which is also as unpopular as increasing taxes.

Biggest budget is MOE - 600B - for education - if you tell kenyans to start paying fees - for their kids - they will be more mad than petrol.

In short - consider that Ndii, IMF, Treasury and many economist have gone through the budget - and this BEST DEAL we can get.

[hk]

HK you're talking in general - but again - symbolic 10% cut in every ministry? Ruto attempted to cut 300B last year - found no headway - because discretionary spending -aka development budget is just suggestion.

You literally need to retrench people, cut education spending, health care - which is also as unpopular as increasing taxes.

Biggest budget is MOE - 600B - for education - if you tell kenyans to start paying fees - for their kids - they will be more mad than petrol.

In short - consider that Ndii, IMF, Treasury and many economist have gone through the budget - and this BEST DEAL we can get.

The current proposed budget is whopping 400b increment from the previous budget from 3.2t to 3.6t. That in itself shows there's a big fiscal space for spending cuts.
Discretionary spending are things like travel, equipment purchases(from cars to furniture), useless consultancy etc basically everything that's not core to the ministry. For example why does office of DP and PM need to be allocated more than 6b? Every parliamentary committee should be going through its line ministry budget and strip out the wasteful unnecessarily allocation. But in kenya government spending is what we call "maendeleo".
The current regime overall economic policy entails government spending to drive and prop up aggregate demand. To this regime almost everything involves government solution instead of market based solution. Its the reason why Ndii derides supply side economics or what they call "trickle down" economics.

[RV Pundit]

400B is basically Eurobond principal that is maturing?

[hk]

400B is basically Eurobond principal that is maturing?

No the  budget allocation for Euro is only 200b. And furthermore the government is arranging for kenya banks to at least buy half of bond. The point is, it wasn't necessary to raise taxes , it would have been easier to cut spending. Strict austerity policy is what supply side economist would have recommended.

[sema]

government is arranging for kenya banks to at least buy half of bond

and the point of this is to do what to the economy exactly?

[RV Pundit]

200b how when dollar is 140 n could end up 150..hk wacha za ovyo

[hk]

200b how when dollar is 140 n could end up 150..hk wacha za ovyo

https://www.theeastafrican.co.ke/tea/business/kenya-gets-300-proposals-on-settling-2b-eurobond-4246334

[Georgesoros]

200b how when dollar is 140 n could end up 150..hk wacha za ovyo

https://www.theeastafrican.co.ke/tea/business/kenya-gets-300-proposals-on-settling-2b-eurobond-4246334

Crisis postponed??

[RV Pundit]

200b how when dollar is 140 n could end up 150..hk wacha za ovyo

https://www.theeastafrican.co.ke/tea/business/kenya-gets-300-proposals-on-settling-2b-eurobond-4246334

Fact is total debt servicing this year rise by 400b.

[hk]

200b how when dollar is 140 n could end up 150..hk wacha za ovyo

https://www.theeastafrican.co.ke/tea/business/kenya-gets-300-proposals-on-settling-2b-eurobond-4246334

Fact is total debt servicing this year rise by 400b.

No it doesn't rise by 400b, the government decided to buy half https://www.bnnbloomberg.ca/ruto-vows-to-buy-back-half-of-kenya-s-2-billion-bond-this-year-1.1936611 of the maturing bond . That's why equity bank are being coerced to purchase $500m worth of euro at the prevailing rate, with the threat of kra business and deposit withdraw(I am privy to the negotiations in a very minor capacity), KCB doesnt have strong enough balance sheet and neither coop. The only bank that can swing $250m is NCBA.
The rest either they'll rollover at higher rate or restructure. Anyhow having committed to repurchase half, they have bought themselves breathing room.

[Georgesoros]

200b how when dollar is 140 n could end up 150..hk wacha za ovyo

https://www.theeastafrican.co.ke/tea/business/kenya-gets-300-proposals-on-settling-2b-eurobond-4246334

Fact is total debt servicing this year rise by 400b.

No it doesn't rise by 400b, the government decided to buy half https://www.bnnbloomberg.ca/ruto-vows-to-buy-back-half-of-kenya-s-2-billion-bond-this-year-1.1936611 of the maturing bond . That's why equity bank are being coerced to purchase $500m worth of euro at the prevailing rate, with the threat of kra business and deposit withdraw(I am privy to the negotiations in a very minor capacity), KCB doesnt have strong enough balance sheet and neither coop. The only bank that can swing $250m is NCBA.
The rest either they'll rollover at higher rate or restructure. Anyhow having committed to repurchase half, they have bought themselves breathing room.

He is forecasting a good economy that will help pay these bills.
He's not applying the right fertilizer.

[gout]

Hasla just adopted ufool handchieth budget. No Ndii genius there. Ndii just seems to be sticking a finger to his NGOist and middle class  peers as he makes Kenya an experiment.

[hk]

Crisis postponed??

The down grade https://www.fitchratings.com/research/sovereigns/fitch-revises-kenya-outlook-to-negative-affirms-at-b-20-07-2023#:~:text=Fitch%20Ratings%20%2D%20Hong%20Kong%20%2D%2020,the%20IDR%20at%20'B'. will only worsen the debt repayment options.