Dr Ndii on kenya debt, eurobond, jubilee, and SGR

[RV Pundit]

Moonki can help.You can also look for Knbs revised documents dating 2014.On the phone  now.Just trust my numbers yawa.

[MOON Ki]

Try understand re-basing first. We can only compare apples to apples.
...
You cannot compare final with interim. Revised with non-revised figures.

Interesting.   Earlier RV Pundit wrote:

Kibadinga growth - 2008 1.7% 2009 2.9% 2010 5.6% 2011 4.2% 2012 4.6%....3.8% (4%)

Jubilee starts in -2013 5.7% 2014 5.3% 2015 5.6% 2016 -so far it average of 6% based on two quarters 5.7%(6%)

MOON Ki then wrote:

(b) With the numbers you give above, you are comparing numbers on one base (the old one) with numbers on a different base (the new one).    Which makes more sense? To do that, or to compare numbers on the same base (the new one)?    I hope you didn't cut all the Logic 101 classes.

Pundit responded with:

Moonki..you're talking nonsense...as always.Your  cannot use rebased revised figures to compare

To which MOON Ki had this:

Please see (b) above.    Instead of the usual petty insults,  take some time to try and understand it; it might also help  you to carefully read the KNBS explanations.    And, briefly: the rebased figures are used for the very simple reason that they are in fact more accurate; see (a) above.

Glad to see the message finally sink in, although subsequent statements show that the sinking-in has only been partial.

Note 1) Moonki was sometime recently deriding the re-based figures.

And where exactly did MOON Ki do that?

[MOON Ki]

Moonki can help.

Sorry, MOON Ki cannot help when it comes to manufactured numbers.

[MOON Ki]

More predictable obtuseness.When we rebased our economy we realized it was 25% bigger than we thought and again nobody knows when those figures went off...but they to be factored from the new base year we chose..5yrs from 2014...if we had chosen to rebase it this year.
..and picked 2012 as base year..our 2012 revised growth rate wold be bigger...and some fool would attribute all that growth to 2012.If like Nigeria we waited for 30yrs before rebasing it to 2008..and revise growth that year to 100%...will you say economy of Nigeria grew 59% in 2010.Absolute obtuse nonsense.Revised growth rate always have * for that..caveat... Understand rebasing first.

Actually nobody has stated or suggested anything like that.  Where did you get  that idea?  What I have done is given the GDP growth figures from the time of rebasing, noted that they are the more accurate figures, and  pointed out who is using them (World Bank etc.).     

I think Nipate readers will by now have a pretty good idea on who needs to understand rebasing first.

[MOON Ki]

NARA borrowed 650M usd commercial loan to fund our election(dr ndoom obstuficate all that)

Astonishing.   That seems like a really huge figure just for elections.    Can we have some more information---sources etc.---so that we can have an objective discussion?

TRYING AGAIN.

[MOON Ki]

We have to wait until we do another re-basing before we can compare revised gdp of 2008-2012 with 2013-2017.  As of now the comparison that make sense will be un-revised gdp figures.

MOON Ki is for comparing numbers on the same base (i.e. from the time of rebasing).   That is what the World Bank, IMF, KNBS, Kenyan Treasury, etc. are all doing.     Perhaps they are all wrong, and RV Pundit can see something they don't, but MOON Ki is going to side with them.   

Why are all those organizations not waiting until comparisons can make Pundit-sense?   First, because the pre-rebasing figures are now known to have been incorrect, and there can be no justification for using incorrect figures when correct ones are available.  (Ati interim vs. interim!)    Second, all current figures must be assumed to be correct until proven otherwise (e.g. in another rebasing); there is actually no other option.

Of course, there will be another rebasing at some point in the future.   At that time, more accurate figures will be available and comparisons will the change.    But it takes very peculiar logic to say that numbers on the same base may not be compared because some of them might later change.

Here is an example for you:

Kenya is one of the bright spots in Sub-Saharan Africa. With economic growth rates sustained at above 5 percent, Kenya has outperformed the regional average, for 8 consecutive years.

https://openknowledge.worldbank.org/handle/10986/25380

What data is the bank using when it analyses the Kenyan economy and compares it with other African economies?  The 8 years in question are 2007 to 2015.    Apparently, the World Bank will not wait, as you suggest: If you take a look at Figure 0.1, they are  apparently quite happy to carry out analyses and make comparisons on the basis of current data (rebased).   Unless you and Omollo have strong and justifiable objections, I encourage you to use Figure 0.1 and related data, as all else are doing.

I would also point out another thing to you and Omollo: In making comparisons across years, you should be careful about 2008 and 2009, and you should make all efforts to stay away from simple-minded comparisons.   The World Bank, for example, attributes the relatively low growth in those years to the (a) PEV and (b) the global financial crisis and high oil prices. (It is, of course possible to attribute the PEV to a particular government and certain people, but I suggest that we skip that for now.  Otherwise, a good text on basic statistics will have helpful suggestions on how to treat obvious anomalies, such as the 2008 figure.)      In relative terms, Kenya actually did quite well in 2009, in that the growth rate exceeded what had been predicted by the World Bank etc.

Finally: "childish nonsense", "predictable nonsense", "obtuseness", etc. have become repetitive and rather tiresome.   If that is the only way in which you can respond, then at least try and show some originality and creativity!

[MOON Ki]

we know we understimate the size of our economy...so the current interim gdp figures are understating growth. Instead of 6% now...we might discovered we actually grew by 10%!

For an economics expert (self-proclaimed, of course), you seem unable to distinguish between two very basic concepts.     The fact that annual changes in  the size of the economy have been under-estimated does not necessarily mean that the corresponding growth rates have similarly been under-estimated.    Yearly upward "size" revisions (which follow from rebasing and the inclusion of more things to measure)  may result in higher or lower corresponding growth rates by year.  Consider this account of Ms. Wanjiku for the last week of December:

Old:  starts with 100 shillings, ends up with 200 shillings.   
Rebased (after including the chicken): starts with 200 shillings, ends up with 400 shillings.   

Her economy is bigger, but the growth rate is the same.    Now consider this:

Rebased: starts with 200 shillings, ends up with 300 shillings.

The size of her economy (relative to "Old") is certainly bigger, and the final 300 vs. 200 shows that the size of her economy was under-estimated, but the growth rate was actually over-estimated.

Concrete example (Kenya):

- Revised GDP for 2008 is 17.8% higher than the old one, and revised GDP for 2012 is 25% higher than the old one.

- Old growth rate for 2008: 1.5%, revised rate: 0.2%.   Old rate for 2012: 4.6%, revised rate: 4.5%

[Omollo]

Thanks MoonKi

Pundit would you like to do the averages for these figures for me please (anybody can help actually)? I am willing to let 2008 be included / excluded.

NARA - (2008 - 0.23, 2009 - 3.31, 2010 - 8.4, 2011 - 6.11, 2012 - 4.55) Average =
Jubilee - (2013 - 5.69, 2014 - 5.33, 2015 - 5.63 , 2016 - Not Available) Average =

Here is the source link Kenya Economic Growth

If the topic was about figures - I certainly would have made effort. It about Jubilee having better managed the economy. Again the elephant in the house..Jubilee on average is rounding up to 6%...while NaRA is rounding down to 3%. And so Dr Ndii nonsense that Jubilee is worst regime is PLAIN NONSENSE. On the contrary facts are showing this is BEST regime.

[Omollo]

The way Pundit is talking about Jubilee's economic management you would think it is the beginning of time. Not so as the graph below shows, other have performed better before.

You will find that the election year or year-after routinely suffer a huge drop in growth ( with a few exceptions). We see the first in 1970, followed by 1975. It is possible that 2017 or/and 2018 or both may even suffer negative growth - undermining the already inferior Jubilee average  :

[RV Pundit]

Okay Omollo - here is previous GDP growth rate and revised. I think there is no need to belabour the point that jubilee has been better stewards of the economy.

[Omollo]

Pundit

You are jumping the gun. First of all you have posted a graph without attribution. What is the source of the data used to prepare it?

Secondly you should develop your case for "Better-Than-NARA" slightly better than you have done so far. Has Jubilee recorded more growth than NARA and if so by how much percent.

Thirdly your own graph shows that revised GDP figures in some cases are lower than earlier ones as is the case with 2007, 2008 and 2012). Your assumption is that when the current figures are subjected to rebasing( or revision as you have stated below), they would inevitably lead to higher growth figures and not lower. I think that is witchcraft.

lastly you have posted figures up to 2013. That means Jubilee has one year to compare to 5 years of NARA. How does that work with you?

Okay Omollo - here is previous GDP growth rate and revised. I think there is no need to belabour the point that jubilee has been better stewards of the economy.

[Omollo]

I found something else I thought Pundit would explain when he has done posting the source of his figures: Kenya's external debt.

I have to wonder what 2 trillion has done.

[RV Pundit]

Omollo,
1) The source of data is KNBS - Revised National Accounts - Kenya National Bureau of Statistics - 2014 - fact book
2) Moonki is asking for 650M USD syndicated loan that he can easily google (quite the expert). That loan is part of what EuroBond repaid. It was borrowed in 2012 and was definitely partially used to finance our most expensive election - IEBC & Security - budget I think exceed 30-40B - which is more than half of 650M usd.
3) We have borrowed more to invest in our future...main component of that debt is SGR...now at more than 5B USD. SGR is projected to contribute 1.5-2% during and after construction - and it expected to repay the loan- once it operational.

[Omollo]

Link please. I need to see it for myself if you don't mind.

Omollo,
1) The source of data is KNBS - Revised National Accounts - Kenya National Bureau of Statistics - 2014 - fact book
2) Moonki is asking for 650M USD syndicated loan that he can easily google (quite the expert). That loan is part of what EuroBond repaid. It was borrowed in 2012 and was definitely partially used to finance our most expensive election - IEBC & Security - budget I think exceed 30-40B - which is more than half of 650M usd.
3) We have borrowed more to invest in our future...main component of that debt is SGR...now at more than 5B USD. SGR is projected to contribute 1.5-2% during and after construction - and it expected to repay the loan- once it operational.

[RV Pundit]

You're wasting my time buddy. Page 12 of that document.
http://www.knbs.or.ke/index.php?option=com_phocadownload&view=category&download=604:information-on-the-revised-national-accounts&id=17:gross-domestic-product&Itemid=597

[Omollo]

Pundit

Now that you have provided the source (I am still verifying to ensure commonality between what you wrote and what appears in the pdf doc. As you know numbers is not my area. Have to be slow), we can move to the next question.

How did you reach the conclusion that Jubilee has performed "better" than NARA.

Take note of the following facts when responding:

• There is no guarantee that rebasing or revision would inevitably lead to higher growth figures is there?
• In fact there is a possibility of the earlier growth figure(s) sinking upon revision

I would also like to know from you if you believe that Ndii based his dire conclusion about Jubilee on growth figures alone or if he considered other indicators

If the topic was about figures - I certainly would have made effort. It about Jubilee having better managed the economy. Again the elephant in the house..Jubilee on average is rounding up to 6%...while NaRA is rounding down to 3%. And so Dr Ndii nonsense that Jubilee is worst regime is PLAIN NONSENSE. On the contrary facts are showing this is BEST regime.

[MOON Ki]

2) Moonki is asking for 650M USD syndicated loan that he can easily google (quite the expert). That loan is part of what EuroBond repaid. It was borrowed in 2012 and was definitely partially used to finance our most expensive election - IEBC & Security - budget I think exceed 30-40B - which is more than half of 650M usd.

First, I have no knowledge of the $650M loan you keep bringing up.     But I know of a $600M loan that was paid back with part of Eurobond.   Where did you get the 650 figure?

Second, this is the statement I was concerned about:

NARA borrowed 650M usd commercial loan to fund our election(dr ndoom obstuficate all that)

That statement is quite different from the revised in which the elections were only partially funded by the loan.

Third, other  than merely asserting it, as usual, you have not offered much in support of the "partial funding" from that  particular source.

Fourth, you do not seem aware of the fact that "donors" financed a large part of the 2013 elections.

Finally, how exactly has Ndii obfuscated anything in regard to that loan or the funding of the elections?

[RV Pundit]

Usual nitpicking. I have seen 600m and 650m figures..perhaps some include interest and fees. The point remain NARA's treasury borrowed expensive 600M or 650m commercial loan that Jubilee retired using Eurobond. Dr Ndii doesn't ackowledge that.

The money is to be used to build roads, dams as well as finance the government implement the constitution

2) Moonki is asking for 650M USD syndicated loan that he can easily google (quite the expert). That loan is part of what EuroBond repaid. It was borrowed in 2012 and was definitely partially used to finance our most expensive election - IEBC & Security - budget I think exceed 30-40B - which is more than half of 650M usd.

First, I have no knowledge of the $650M loan you keep bringing up.     But I know of a $600M loan that was paid back with part of Eurobond.   Where did you get the 650 figure?

Second, this is the statement I was concerned about:

NARA borrowed 650M usd commercial loan to fund our election(dr ndoom obstuficate all that)

That statement is quite different from the revised in which the elections were only partially funded by the loan.

Third, other  than merely asserting it, as usual, you have not offered much in support of the "partial funding" from that  particular source.

Fourth, you do not seem aware of the fact that "donors" financed a large part of the 2013 elections.

Finally, how exactly has Ndii obfuscated anything in regard to that loan or the funding of the elections?

[RV Pundit]

Which is why we can only use non-revised figures against non-revised figures.We have to wait for final figures couple of years before we can conclude. And as for dr Ndii - he has been making wild allegations every week - nobody takes him seriously. Not world bank or Imf or any serious institutions. When invited to go to Nairobi University to face debate - he ducked. When invited to go to statehouse to face treasury - he ducked. He appears in forum he cannot be challenged- like nation and cord rallies. That is not an intellectual. He is just a politician seeking to make money from donors and seek favour from cord.

Pundit

Now that you have provided the source (I am still verifying to ensure commonality between what you wrote and what appears in the pdf doc. As you know numbers is not my area. Have to be slow), we can move to the next question.

How did you reach the conclusion that Jubilee has performed "better" than NARA.

Take note of the following facts when responding:

• There is no guarantee that rebasing or revision would inevitably lead to higher growth figures is there?
• In fact there is a possibility of the earlier growth figure(s) sinking upon revision

I would also like to know from you if you believe that Ndii based his dire conclusion about Jubilee on growth figures alone or if he considered other indicators

If the topic was about figures - I certainly would have made effort. It about Jubilee having better managed the economy. Again the elephant in the house..Jubilee on average is rounding up to 6%...while NaRA is rounding down to 3%. And so Dr Ndii nonsense that Jubilee is worst regime is PLAIN NONSENSE. On the contrary facts are showing this is BEST regime.

[MOON Ki]

Usual nitpicking. I have seen 600m and 650m figures..perhaps some include interest and fees. The point remain NARA's treasury borrowed expensive 600M or 650m commercial loan that Jubilee retired using Eurobond. Dr Ndii doesn't ackowledge that.

The statement I was responding to:

NARA borrowed 650M usd commercial loan to fund our election(dr ndoom obstuficate all that)

On the rest: You seem to think that Ndii should be excited about Jubilee borrowing money to pay a loan.  I can't imagine why; even you can do that sort of thing with your credit cards.   What would be worth noting: Jubliee paying off debt, instead of digging even deeper into the debt-pit.