Ndii interview on Citizen shortly

[hk]

yes we qualify for concession loans. But the amount we qualify for can't plug our deficit to shift from borrowing from local and international debt markets.

I'm glad we've taken care of that part, and Ndii is now to be beaten up on quite different grounds.   So, then.   To the new stuff:

Would  Ndii know how much IDA money exists out there and how many countries are able to partake?   (By the way the number of countries is 77, not "100 plus" you mentioned.)  Would he believe, and did he suggest, that Kenya's annual budget deficit (which you state is $7 billion to $8 billion) can be plugged through concessional loans?

I listened to the relevant of the interview, and my understanding is that he was talking about a reduction in commercial (and especially local)  borrowing.   Can such borrowing be reduced by instead taking concessional loans?    I believe so.

Earlier you also  had this:

If he were to argue about slashing the budget that's would be one thing.

At one point he does state that the government should "reduce its appetite for money".    I interpreted that to mean a reduction in government expenditure, and, therefore, the budget ... (relative to revenue).   How did you interpret it?

An aside: The interviewer-lady has problems that go far beyond a lack of understanding of even the most basic aspects of economics or the inability to follow a straightforward line of reasoning. It appears that she does not even understand basic, common phrases in colloquial English, contrary to what one would expect of an interviewer for this type of show.

For example:   

At one point Ndii says that the government should "stop digging the [debt] hole".    The interview-lady asks if that means "cancelling existing debt agreements"!!!!! Ndii then has to spend some time explaining that, no, existing debts must be paid, but ....  And so on, and so forth.  Where on earth did they find this "blonde" lady?

The total commercial debt if this figures from central bank are correct is only $110m for this year https://www.centralbank.go.ke/domestic-debt-intrument/ that's not alot and any savings to concessionary loans would be much . If I understood nasa manifesto its more expansionary especially on the social aspects. So that seems like contradiction on borrowing reduction.

[MOON Ki]

The total commercial debt if this figures from central bank are correct is only $110m for this year https://www.centralbank.go.ke/domestic-debt-intrument/ that's not alot and any savings to concessionary loans would be much . If I understood nasa manifesto its more expansionary especially on the social aspects. So that seems like contradiction on borrowing reduction.

First, I should note that Ndii referred to "local borrowing" in that context and did not use the word "commercial"; that was my word.    I point that out so that we don't get into trivial side-issues about what is from commercial banks and what comes from elsewhere.   So let's focus on the "local borrowing" that concerns Ndii.

While in China (a "favourite" lender, it seems) in May, I came across this startling article (written in May). [I will explain the context later, but it does not bode well for some Kenyan's view of "easy and generous Kung Fu].    According to that:

Kenya's domestic debt rose by 1.1 billion U.S. dollars in two months, gravitating closer to 20 billion U.S. dollars as the government intensifies domestic borrowing ahead of the close of the fiscal year.
...
Last month, Kenya raised 318 million dollars from two ten-year bonds worth 291 million dollars it floated to cover end of fiscal year deficit.
...
However, besides the T-bonds, uptake of Treasury bills has equally increased with the CBK last week accepting 320 million dollars from the 91-day, 182-day and 364-day bill.

http://news.xinhuanet.com/english/2017-05/09/c_136269043.htm

Perhaps they are all off by a factor of 10 or so? On the basis of some figures that  I saw elsewhere at the time, I saw no reason to not believe them?

But let's look at the figures you have provided at that link there.    Perhaps I'm reading them incorrectly, or I have missed something.   But looking at the figures from January to now, I come up with a difference of about Sh. 151 billion, which is currently about $1.45 billion .... which is a long way from $110 million. 

While we try to figure out the figures, may I again make this observation: Ndii is, by international standards, regarded (as far as I can tell) as a top-notch economist.   Let's not be hasty with statements to the effect that he is an economic idiot and doesn't know what he's talking about ... with his detractors contributing little jokes,  like 

Jubilee have borrowed cheaper loans from EuroBond and Chinese loans are at about the same concessionary rates as WB.

On the other stuff:

If I understood nasa manifesto its more expansionary especially on the social aspects. So that seems like contradiction on borrowing reduction.

I haven't looked at the "manifesto", so I can't comment from that basis.   But I can comment on the basis of simple logic:  A call for reduction in borrowing does not necessarily mean that all expenditure must be reduced.   It is possible to have an "overall reduction" even with increases in some components of the budget.

[hk]

The total commercial debt if this figures from central bank are correct is only $110m for this year https://www.centralbank.go.ke/domestic-debt-intrument/ that's not alot and any savings to concessionary loans would be much . If I understood nasa manifesto its more expansionary especially on the social aspects. So that seems like contradiction on borrowing reduction.

First, I should note that Ndii referred to "local borrowing" in that context and did not use the word "commercial"; that was my word.    I point that out so that we don't get into trivial side-issues about what is from commercial banks and what comes from elsewhere.   So let's focus on the "local borrowing" that concerns Ndii.

While in China (a "favourite" lender, it seems) in May, I came across this startling article (written in May). [I will explain the context later, but it does not bode well for some Kenyan's view of "easy and generous Kung Fu].    According to that:

Kenya's domestic debt rose by 1.1 billion U.S. dollars in two months, gravitating closer to 20 billion U.S. dollars as the government intensifies domestic borrowing ahead of the close of the fiscal year.
...
Last month, Kenya raised 318 million dollars from two ten-year bonds worth 291 million dollars it floated to cover end of fiscal year deficit.
...
However, besides the T-bonds, uptake of Treasury bills has equally increased with the CBK last week accepting 320 million dollars from the 91-day, 182-day and 364-day bill.

http://news.xinhuanet.com/english/2017-05/09/c_136269043.htm

Perhaps they are all off by a factor of 10 or so? On the basis of some figures that  I saw elsewhere at the time, I saw no reason to not believe them?

But let's look at the figures you have provided at that link there.    Perhaps I'm reading them incorrectly, or I have missed something.   But looking at the figures from January to now, I come up with a difference of about Sh. 151 billion, which is currently about $1.45 billion .... which is a long way from $110 million. 

While we try to figure out the figures, may I again make this observation: Ndii is, by international standards, regarded (as far as I can tell) as a top-notch economist.   Let's not be hasty with statements to the effect that he is an economic idiot and doesn't know what he's talking about ... with his detractors contributing little jokes,  like 

Jubilee have borrowed cheaper loans from EuroBond and Chinese loans are at about the same concessionary rates as WB.

On the other stuff:

If I understood nasa manifesto its more expansionary especially on the social aspects. So that seems like contradiction on borrowing reduction.

I haven't looked at the "manifesto", so I can't comment from that basis.   But I can comment on the basis of simple logic:  A call for reduction in borrowing does not necessarily mean that all expenditure must be reduced.   It is possible to have an "overall reduction" even with increases in some components of the budget.

The $110m was total commercial debt for this year.  Ndii is right about we're borrowing too much in the short term and not as much longterm .The ratio of tbills to bonds is now 1:2 and preferably that should be 1:5. This has effect on cost of interest rates cause tbills are more expensive to rollover.

[RV Pundit]

And main problem that Treasury is grappling with and which Dr Ndii doesn't have solution for - is New Constitution - created more stress for National Treasury by having lots more folks & institution drawing money from Consolidated Fund - and then you have counties who need money - without question.
-Basically we are borrowing lot more for short term because treasury has to meet obligation it cannot ran away.
1) Has to repay debt every month - last I checked it was 35-50B per month
2) Unfunded pension - where pension are paid directly from Treasury - instead of contributory scheme (this been on the works forever - hopefully will go live this year).
3) Counties & Institution drawing lot more money directly from Consolidated Fund
4) Salaries for GoK employees.

I doubt Treasury has suddenly dumb prudential management of public finance and borrowed short-term to finance anything not critical.

We have added with 2010 constitution lot more critical stuff to treasury plate.

The $110m was total commercial debt for this year.  Ndii is right about we're borrowing too much in the short term and not as much longterm .The ratio of tbills to bonds is now 1:2 and preferably that should be 1:5. This has effect on cost of interest rates cause tbills are more expensive to rollover.