Yes we do not need the blood IMF standby facility and their stupid conditions.

[RV Pundit]

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The sooner Uhuru tell off IMF the better for Kenya.

https://www.businessdailyafrica.com/news/Uhuru-adviser-hits-out-at-IMF-s-Sh150bn-loan-terms/539546-4711502-t7yxxwz/index.html

[hk]

The sooner Uhuru tell off IMF the better for Kenya.

https://www.businessdailyafrica.com/news/Uhuru-adviser-hits-out-at-IMF-s-Sh150bn-loan-terms/539546-4711502-t7yxxwz/index.html

Thugge and Rotich have already agreed to the terms when the standby loan was renewed. Its very simple if the government doesn't like the terms, then they shouldn't take the loan. we'll see how long the shilling can hold up. BTW the diaspora influx is being driven by tax amnesty https://www.taxkenya.com/kenya-tax-amnesty-in-respect-of-foreign-assets-and-income/ so this isn't going to last. 

[RV Pundit]

Hk we never need imf to protect kshs.what is 1.5b dollars in our economy.peanuts.

[Georgesoros]

The sooner Uhuru tell off IMF the better for Kenya.

https://www.businessdailyafrica.com/news/Uhuru-adviser-hits-out-at-IMF-s-Sh150bn-loan-terms/539546-4711502-t7yxxwz/index.html

Thugge and Rotich have already agreed to the terms when the standby loan was renewed. Its very simple if the government doesn't like the terms, then they shouldn't take the loan. we'll see how long the shilling can hold up. BTW the diaspora influx is being driven by tax amnesty https://www.taxkenya.com/kenya-tax-amnesty-in-respect-of-foreign-assets-and-income/ so this isn't going to last. 

iF govt had stopped spending like drunks, we couldn't be in such dire situation. They were told to cut spending 5yrs ago but they said the economy will outgrow it. Time to pay.

[hk]

Hk we never need imf to protect kshs.what is 1.5b dollars in our economy.peanuts.

Really? Why then does treasury need a insurance standby loan? Kenya has dollar dominated debt(foreign currency dominated debt) due so a depreciation of kenya shilling would mean costly debt repayments.

[Georgesoros]

There is a Kshs 6 trillion debt currently outstanding.

[MOON Ki]

The sooner Uhuru tell off IMF the better for Kenya.

https://www.businessdailyafrica.com/news/Uhuru-adviser-hits-out-at-IMF-s-Sh150bn-loan-terms/539546-4711502-t7yxxwz/index.html

Wow.   According to the writer, Uhuru's chap



I got lost right there.   If I recall correctly, Kenya went to the IMF to ask for this facility and has repeatedly done plenty of begging over it.      If now Kenya no longer needs it, then there is no need to hit out or whatever; Kenya can simply write a letter saying "thank you, no longer needed".   As far as I can tell, the IMF has no shortage of those that need its money.

As to the statements that Kenya has plenty in its foreign reserves, enough for 6 months of import cover, and what-not, there's this:

* In March this year, Kenya went to the IMF begging for an extension of that facility.   In that and an accompanying letter by Rotich and Njoroge (pleading drought, elections, etc.).  Kenya promised to do all sorts of things ... and so "please, please extend!".  The request and  letter are here: https://www.imf.org/~/media/Files/Publications/CR/2018/cr1883.ashx

In March 2018, Kenya had 6 months worth of cover for foreign imports, which is about the same as what it has right now.   So if that much cover is enough to not beg now, why was there begging in March?   Let's take a closer look at what has actually been said.

* Supposedly even Patrick Njoroge of the CBK has said that we no longer need this money.  So there!, the thinking seems to go.   Mr. Njoroge is a bright fellow, and I was astonished to read that he had supposedly stated something that "dumb" just a few months after signing the begging letter to the IMF.   So I too a closer look.   As it turns out, his words were appropriately nuanced, something that was not appreciated by even the journalists reporting on the same.

Here's an example: https://www.nation.co.ke/business/CBK-now-says-shilling-does-not-need-IMF-guarantee/996-4691192-ywj9qc/index.html

That's not quite it.  The Nation article then gives us Mr. Njoroge's exact words, and they should be read carefully:

from that perspective. We have 5.9 months of import cover. We are pretty comfortable in that sense

From that perspective.  In that sense.  So, is there another perspective?   Another sense?   Yes:

But speaking at a news conference in Nairobi on Tuesday, following a Monetary Policy Committee interest rate decision on Monday, Dr Njoroge said the facility would be crucial to provide liquidity to the financial system, if necessary.

Crucial.   If necessary.   As I understand it, that is what the facility is about and has always been about, whence the word "standby".  In fact "crucial" and "necessary" are conditions to draw on that facility.  It is not about whether it is needed this very minute.

Is $1.5 billion peanuts in an economy of Kenya's size?   Many would consider Kenya's economy to be peanut-sized, but we won't get anywhere talking about peanuts in a peanut.  Instead, let's reflect om the fact that not too long ago Kenyan had trouble paying a syndicated loan of $0.6 billion and only managed to do so by taking yet another loan (Eurobond).   I believe there is a similar, but slightly larger, loan due early next year?  How that particular peanut will be repaid is far from clear.

I'd never heard of this Uhuru man who's landing blows on the IMF.   So I thought I should take a look at the "presidency's" website and start there, by way of finding out who's doing what and in what ways, and so on and so forth.   I stopped at page 1, on the "Big Four": http://www.president.go.ke/

The first thing there is manufacturing.  In Kenya that has stagnated for ages at around 10+/-1 % of GDP.    But, finally, salvation is at hand.   According to the President & His Men, we are about to leap from 9.2% of GDP to 20% of GDP by 2022.   No shit.     How?   We won't ask.  That would be nit-picking.   Perhaps we can get some comfort form past major projects.   In 2013 we heard about the 1-million-acre Galana project that was going to feed Kenyans.    And sure enough, there were Kenyans that "ate big" from it ... just not maize, and just not Wanjiku.  Laptops?    Haven't heard much about that lately, but what do people make of this?:   

https://www.standardmedia.co.ke/article/2001267149/school-has-laptops-but-no-desks-and-classrooms-in-west-pokot

and this one

https://www.nation.co.ke/news/Big-hurdles-thwart-Jubilee-s-laptops-plan/1056-4676332-9w2jndz/index.html

and this one: https://www.standardmedia.co.ke/article/2001270444/school-abandons-computer-lessons-as-tablets-remains-unpowered

This is one I really like:

https://www.standardmedia.co.ke/article/2001284304/jubilee-s-school-laptops-sold-to-uganda-plays-music-in-a-busaa-club

But not to worry.   A bunch of .pdf files on a bunch of tablet, and the next generation on Kenyan technological revolutionaries are set to go.   In fact, Konza City could well have something real by the time they are adults.   Plus, there's a "high-level" government body looking at Blockchain.

Never mind.  Let's go back to drinking the Kool Aid. 

[RV Pundit]

The consensus is we don't need IMF, their standby loan and their stupidity conditionalities. Kenya in 2018 is not 90s when we had to listen to IMF. What we need is to figure out how to quietly exit the IMF loan without sending wrong signal to the market.

BD - https://www.businessdailyafrica.com/analysis/editorials/Rejecting-IMF-loan-terms-makes-sense/4259378-4712680-nlysvjz/index.html
https://www.businessdailyafrica.com/analysis/ideas/Lenders-push-for-16pc-VAT-on-fuel-irrational/4259414-4712666-ckeh1v/index.html

If I recall nobody really asked IMF for this stand by loan and I doubt if we have ever tapped into it. I know when USD was strengthening against all currency (kshs inclusive) - IMF dolled out this standby facility to many countries and seem it was a trojan horse for those Washington fools to interfere with our fiscal policy.

USD is no longer strengthening and we are happy to have dollar at 100shs to a dollar. Kick the bloody IMF out of Kenya.

[RV Pundit]

If I recall - it's IMF who came up with this standby facility and extended to many countries including kenya. We don't need it. I doubt we have ever taken the loan anyway. We are just afraid to tell IMF off because it could send the wrong signal to the market - that kenya is "broke" or has failed to meet some IMF fiscal policy. We just need to tell off IMF diplomatically and quietly.
https://www.standardmedia.co.ke/business/article/2001266311/imf-back-up-credit-facility-unnecessary-says-experthttps://www.standardmedia.co.ke/business/article/2001266311/imf-back-up-credit-facility-unnecessary-says-expert

The sooner Uhuru tell off IMF the better for Kenya.

https://www.businessdailyafrica.com/news/Uhuru-adviser-hits-out-at-IMF-s-Sh150bn-loan-terms/539546-4711502-t7yxxwz/index.html

Wow.   According to the writer, Uhuru's chap



I got lost right there.   If I recall correctly, Kenya went to the IMF to ask for this facility and has repeatedly done plenty of begging over it.      If now Kenya no longer needs it, then there is no need to hit out or whatever; Kenya can simply write a letter saying "thank you, no longer needed".   As far as I can tell, the IMF has no shortage of those that need its money.

As to the statements that Kenya has plenty in its foreign reserves, enough for 6 months of import cover, and what-not, there's this:

* In March this year, Kenya went to the IMF begging for an extension of that facility.   In that and an accompanying letter by Rotich and Njoroge (pleading drought, elections, etc.).  Kenya promised to do all sorts of things ... and so "please, please extend!".  The request and  letter are here: https://www.imf.org/~/media/Files/Publications/CR/2018/cr1883.ashx

In March 2018, Kenya had 6 months worth of cover for foreign imports, which is about the same as what it has right now.   So if that much cover is enough to not beg now, why was there begging in March?   Let's take a closer look at what has actually been said.

* Supposedly even Patrick Njoroge of the CBK has said that we no longer need this money.  So there!, the thinking seems to go.   Mr. Njoroge is a bright fellow, and I was astonished to read that he had supposedly stated something that "dumb" just a few months after signing the begging letter to the IMF.   So I too a closer look.   As it turns out, his words were appropriately nuanced, something that was not appreciated by even the journalists reporting on the same.

Here's an example: https://www.nation.co.ke/business/CBK-now-says-shilling-does-not-need-IMF-guarantee/996-4691192-ywj9qc/index.html

That's not quite it.  The Nation article then gives us Mr. Njoroge's exact words, and they should be read carefully:

from that perspective. We have 5.9 months of import cover. We are pretty comfortable in that sense

From that perspective.  In that sense.  So, is there another perspective?   Another sense?   Yes:

But speaking at a news conference in Nairobi on Tuesday, following a Monetary Policy Committee interest rate decision on Monday, Dr Njoroge said the facility would be crucial to provide liquidity to the financial system, if necessary.

Crucial.   If necessary.   As I understand it, that is what the facility is about and has always been about, whence the word "standby".  In fact "crucial" and "necessary" are conditions to draw on that facility.  It is not about whether it is needed this very minute.

Is $1.5 billion peanuts in an economy of Kenya's size?   Many would consider Kenya's economy to be peanut-sized, but we won't get anywhere talking about peanuts in a peanut.  Instead, let's reflect om the fact that not too long ago Kenyan had trouble paying a syndicated loan of $0.6 billion and only managed to do so by taking yet another loan (Eurobond).   I believe there is a similar, but slightly larger, loan due early next year?  How that particular peanut will be repaid is far from clear.

I'd never heard of this Uhuru man who's landing blows on the IMF.   So I thought I should take a look at the "presidency's" website and start there, by way of finding out who's doing what and in what ways, and so on and so forth.   I stopped at page 1, on the "Big Four": http://www.president.go.ke/

The first thing there is manufacturing.  In Kenya that has stagnated for ages at around 10+/-1 % of GDP.    But, finally, salvation is at hand.   According to the President & His Men, we are about to leap from 9.2% of GDP to 20% of GDP by 2022.   No shit.     How?   We won't ask.  That would be nit-picking.   Perhaps we can get some comfort form past major projects.   In 2013 we heard about the 1-million-acre Galana project that was going to feed Kenyans.    And sure enough, there were Kenyans that "ate big" from it ... just not maize, and just not Wanjiku.  Laptops?    Haven't heard much about that lately, but what do people make of this?:   

https://www.standardmedia.co.ke/article/2001267149/school-has-laptops-but-no-desks-and-classrooms-in-west-pokot

and this one

https://www.nation.co.ke/news/Big-hurdles-thwart-Jubilee-s-laptops-plan/1056-4676332-9w2jndz/index.html

and this one: https://www.standardmedia.co.ke/article/2001270444/school-abandons-computer-lessons-as-tablets-remains-unpowered

This is one I really like:

https://www.standardmedia.co.ke/article/2001284304/jubilee-s-school-laptops-sold-to-uganda-plays-music-in-a-busaa-club

But not to worry.   A bunch of .pdf files on a bunch of tablet, and the next generation on Kenyan technological revolutionaries are set to go.   In fact, Konza City could well have something real by the time they are adults.   Plus, there's a "high-level" government body looking at Blockchain.

Never mind.  Let's go back to drinking the Kool Aid. 

[MOON Ki]

Here you will find Njoroge and Rotich begging for extensions, giving all sorts of excuses and what-not:   https://www.imf.org/~/media/Files/Publications/CR/2018/cr1883.ashx 

That was just a few months ago, when, as I have noted, Kenya's export cover was no different.  Those are the two you need to enlighten with your "facts".   I am just an observer here.   

As for the Barclays chap, he is entitled to his opinion, but I doubt that he has much say in these matters.   At any rate, I have seen little evidence that his opinion matters here, either to the IMF or to Njoroge, Rotich, etc.

Pundit also states that:

If I recall nobody really asked IMF for this stand by loan ...

Well, it looks like your recollection isn't what it used to be.  Or do you think the IMF forced it on Kenya?

Here it is:  https://www.imf.org/en/Publications/CR/Issues/2016/12/31/Kenya-Request-for-Stand-by-Arrangement-and-an-Arrangement-Under-the-Standby-Credit-Facility-42685

Kenya : Request for Stand-by Arrangement and an Arrangement Under the Standby Credit Facility.

And in the same place you will find all sorts of associated subsequent begging.

... and I doubt if we have ever tapped into it.

That hasn't happened, because the conditions are quite strict.  What Njoroge terms "crucial" and "necessary".    It is about planning for contingencies, rather than waiting until things go really wrong and then wailing " mzungu, come here quick and help!".   Too bad we don't even try to do that with the basics, such as food.

[hk]

Back in June IMF had withdrawn the loan facility and treasury didn't reveal that information or outright lied about it https://www.bloomberg.com/news/articles/2018-02-19/kenya-lost-imf-facility-last-year-someone-tell-the-central-bank . This was done to ostensibly protect the shilling. At the time kenya had $7b forex reserve yet desperately needed the insurance. Today forex has increased to $8b due to amnesty. Its not like Kenya has increased its export, or diaspora has increased their incomes. With debt repayments due, kenya can't afford shilling depreciation. A depreciation of 10% would mean increased interest rate of the same. In addition to increased prices of fuel and all other imports. Treasury has already agreed to the conditions, including scrapping of interest rates caps and reduction of deficit. This was done cause the consequences of not having that facility are dire.

[RV Pundit]

If we ever needed it - it was during 2016 USD global crisis - I doubt we have ever used it - CBK has done a great job defending KSHS. KSHS has been African most stable currency. This standby loan is nice-to-have not a must-have. We DO NOT NEED it. Not with impossible conditions.

Here you will find Njoroge and Rotich begging for extensions, giving all sorts of excuses and what-not:   https://www.imf.org/~/media/Files/Publications/CR/2018/cr1883.ashx 

That was just a few months ago, when, as I have noted, Kenya's export cover was no different.  Those are the two you need to enlighten with your "facts".   I am just an observer here.   

As for the Barclays chap, he is entitled to his opinion, but I doubt that he has much say in these matters.   At any rate, I have seen little evidence that his opinion matters here, either to the IMF or to Njoroge, Rotich, etc.

Pundit also states that:

If I recall nobody really asked IMF for this stand by loan ...

Well, it looks like your recollection isn't what it used to be.  Or do you think the IMF forced it on Kenya?

Here it is:  https://www.imf.org/en/Publications/CR/Issues/2016/12/31/Kenya-Request-for-Stand-by-Arrangement-and-an-Arrangement-Under-the-Standby-Credit-Facility-42685

Kenya : Request for Stand-by Arrangement and an Arrangement Under the Standby Credit Facility.

And in the same place you will find all sorts of associated subsequent begging.

... and I doubt if we have ever tapped into it.

That hasn't happened, because the conditions are quite strict.  What Njoroge terms "crucial" and "necessary".    It is about planning for contingencies, rather than waiting until things go really wrong and then wailing " mzungu, come here quick and help!".   Too bad we don't even try to do that with the basics, such as food.

[RV Pundit]

Why are consequence dire when we have nearly 7 months of forex cover? This is nice-to-have and yes because we got it - losing it - would send bad signals to the economy - and as you know that could have huge effect - like during kimunya mess sometime back in Kibaki era. Therefore for me and it seem to be consensus now - we have to wriggle ourselves out of IMF - with as little hue and cry as possible. I am glad everyone that matter seem to agree that IMF have lost the plot here - there is no way parliament will scrap interest cap and there is no way increasing fuel prices to 130shs will be allowed.

Back in June IMF had withdrawn the loan facility and treasury didn't reveal that information or outright lied about it https://www.bloomberg.com/news/articles/2018-02-19/kenya-lost-imf-facility-last-year-someone-tell-the-central-bank . This was done to ostensibly protect the shilling. At the time kenya had $7b forex reserve yet desperately needed the insurance. Today forex has increased to $8b due to amnesty. Its not like Kenya has increased its export, or diaspora has increased their incomes. With debt repayments due, kenya can't afford shilling depreciation. A depreciation of 10% would mean increased interest rate of the same. In addition to increased prices of fuel and all other imports. Treasury has already agreed to the conditions, including scrapping of interest rates caps and reduction of deficit. This was done cause the consequences of not having that facility are dire.

[vooke]

[RV Pundit]

We never had this facility until recently and our free floating Kshs has held steady since 1993! Why would we suddenly ran short of forex when Nairobi is a magnet of forex? We only got this facility when USD was on rampage globally and IMF came hawking this product to treasury. We do not need it esp if it mean surrendering the sovereignty of our nation back to IMF. Now IMF is dictating which laws parliament will pass or not. This is pure nonsense. At least Chinese have direct stake...but for an insurer to come and demand that you ammend laws or raise fuel price to 130...it insanity. I think IMF will be told to f. off very soon.

[Nefertiti]

Pundit if you consider your dismissal of Dr Ndii on the economy - and now his vindication by IMF and many credible experts - you will see your clear and open bias for Jubilee's performance.

[RV Pundit]

Dr Ndii is a confirmed idiot who plays economics with politics. I am glad NMG kicked him out. IMF history in kenya is replete of huge blunders. This is one of them.They are demanding we buy petrol at 130shs and allow banks to levy 25% interests. And all that so they can give us an overdraft facility in case we ever ran out of forex. Something that last happened in 1993. Right now we are about twice the forex we need to covert our needs.

This has nothing to do with Jubilee. I have quoted Barclays Bank Africa Chief Economist telling kenyan to ignore IMF. Is he also Jubilee? The BusinessDaily Editorial today also tells Jubilee to tell IMF to go f. themselves.

There are probably a few things IMF and WB have got right - I can't recall any - countries in world have grown by disregarding IMF advices. IMF & WB are filled with ivy leagues idiots whose economic trainings are irrelevant to an economy like ours. They are probably relevant in matured economies...but here in Africa, Latin America or Asia..IMF record is nothing but a HUGE DISASTER. You don't need to be an economist to know that 130shs for litre of petrol or removing interest cap is bad bad ideas.

We should study what Asian tigers did, what China is doing and such countries who some went to extend of expelling IMF & WB. Jubilee has been doing well on that front - Western Envoys now know their place...and it about time to tell IMF & WB to fuck off.

Listen to China and Africa Dev Bank. The likes of South Korea grew by doing the opposite of whatever IMF & WB prescribed.

Pundit if you consider your dismissal of Dr Ndii on the economy - and now his vindication by IMF and many credible experts - you will see your clear and open bias for Jubilee's performance.

[GeeMail]

I'm wondering about Pundit's legendary flipflops. 1. Did Kenya ask or not ask for the IMF facility? Pundit claims IMF came hawking it. 2. Does Kenya need or not need the IMF extensions? Pundit claims Kenya does not need it because it has never used it. If MPs threw out the sugar report on the basis of Duale Advice, what makes anybody think MPs will not ok the Sh130 fuel hike or the interest rate caps will remain in place? Banks have been circling around the Kenyan customer and they can see MPs ready to descend on the kill.

[RV Pundit]

If I recall - when Kenya like everyone was facing headwinds on USD -- IMF came hawking their standby facility - and I doubt we have ever used it. CBK does a great job defending our KSHS without IMF help. As for the rest of your nonsense - shove it up.

I'm wondering about Pundit's legendary flipflops. 1. Did Kenya ask or not ask for the IMF facility? Pundit claims IMF came hawking it. 2. Does Kenya need or not need the IMF extensions? Pundit claims Kenya does not need it because it has never used it. If MPs threw out the sugar report on the basis of Duale Advice, what makes anybody think MPs will not ok the Sh130 fuel hike or the interest rate caps will remain in place? Banks have been circling around the Kenyan customer and they can see MPs ready to descend on the kill.

[GeeMail]

Pundit will blame the ethnicity of the author, not on the stubbornness of the facts. Who is the hawker and the borrower in this Nation story?

IMF gives Kenya 6-month standby loan extension
THURSDAY MARCH 15 2018
By NEVILLE OTUKI
More by this Author
The International Monetary Fund (IMF) has approved Kenya made a request for extension of the loan to IMF officials who came visiting in Nairobi early this month.

IMF approved the $1.5 billion credit line on March 14, 2016 for a period of 24 months, as precautionary facility that Kenya could draw should the economy be in distress.