Some people never learn. UhuRuto playing them for dummies

[hk]

Interesting that all this not capture by economic data from KNBS.I am not sure what new taxes Jubilee have introudced apart from housing, mobile money & vat reforms - and they shouldn't have such an effect on consumption. If private sector was struggling - we would see in economic sector data. I know there is a credit squeeze - but it's not bad - credit or lending as been growing - just single digit - instead of double digit - and really everyone seem happy with interest caps. Interests that had risen to 25% pa was never going to help anyway.

This is the best illustration of what I have been saying. The economy is being driven by public investments https://www.businessdailyafrica.com/news/Public-investments-top-economic-growth-driver/539546-4390920-131euivz/index.html .An economy driven by public investment(inflated to make it worse) isn't felt by kawaida mwananchi.  Take example  this road https://www.standardmedia.co.ke/article/2001309342/the-sh2-8-billion-project-may-be-behind-uhuru-kuria-wars . Its a total of 28km at a cost 2.8b, so  a km cost 100m. That means its inflated by about 4 to 5 times. This literally means about 1.5b is taken out of "real economy" since the government has either taxed or borrowed to finance the project. As a result the multiplier effect of the road is minimal since the users would have been deprived of 1.5b. This in a nutshell is what's happening countrywide.
Credit growth started slowing way before capping of rates dues to government overborrowing locally. Capping of rates has enabled government to borrow cheaply, the interest of treasury bills would have risen to 20% which would have forced government to stop borrowing. The unwinding of this credit binge is going to be painful since one can't avoid economic fundamental laws forever. BTW how come under jubilee we have borrowed internationally (Eurobonds) and still increased local borrowing, crowding out the private sector?

[RV Pundit]

I have been a proponent of public investment - coz we know private sector can grow our economy at around 4% tops like previously - and now the extra 2% if coming from the mostly debt driven infrastructure driven. I think your complains are not captured on economic data - because they don't simply exists. The economy is doing fine at 6%. The corruption doesn't mean the money is taken out - unless the corrupt were to bank them externally say in Swiss banks. What is helping public sector is chinese contractors - working day and night to deliver. Previously gov would contract our local or international contractors that had no capacity or financial muscle. You see the same kamikaze contractors in counties...When it come to credit growth - you need to understand that mobile lending has already overtaken the brick n mortar banks loans - I think Mshwari & KCB are doing something close to 150B - Mshwari alone lends I think close to 100B. And we have 50 digital credit service providers filling the gaps that high interest loans were doing.

In short don't worry - the economy is fine.

Again we need to accelerate public investment. I hope Jubilee can really borrow a leaf from Ethiopia. Ethiopia are growing at 8-10% for nearly 30yrs just banking on public investment.

Right now we need to keep focusing on the BASICs. ROADS, PIPED WATER, SEWAGE, ELECTRICITY and RAILS. Gov need to establish a huge infrastructure fund...I would sell shares in Safaricom, KPA, National OIl, Kenya Pipeline, KAA, name any gov cash-cows - and put the money into infrastructure deficit fund - and borrow the remainder - and then go into construction binge all over the country of roads, rails, dams, hospitals, schools, colleges, universities and such basic infrastructure. That should see economy growing 10% for a decade.

This is the best illustration of what I have been saying. The economy is being driven by public investments https://www.businessdailyafrica.com/news/Public-investments-top-economic-growth-driver/539546-4390920-131euivz/index.html .An economy driven by public investment(inflated to make it worse) isn't felt by kawaida mwananchi.  Take example  this road https://www.standardmedia.co.ke/article/2001309342/the-sh2-8-billion-project-may-be-behind-uhuru-kuria-wars . Its a total of 28km at a cost 2.8b, so  a km cost 100m. That means its inflated by about 4 to 5 times. This literally means about 1.5b is taken out of "real economy" since the government has either taxed or borrowed to finance the project. As a result the multiplier effect of the road is minimal since the users would have been deprived of 1.5b. This in a nutshell is what's happening countrywide.
Credit growth started slowing way before capping of rates dues to government overborrowing locally. Capping of rates has enabled government to borrow cheaply, the interest of treasury bills would have risen to 20% which would have forced government to stop borrowing. The unwinding of this credit binge is going to be painful since one can't avoid economic fundamental laws forever. BTW how come under jubilee we have borrowed internationally (Eurobonds) and still increased local borrowing, crowding out the private sector?

[hk]

I have been a proponent of public investment - coz we know private sector can grow our economy at around 4% tops like previously - and now the extra 2% if coming from the mostly debt driven infrastructure driven. I think your complains are not captured on economic data - because they don't simply exists. The economy is doing fine at 6%. The corruption doesn't mean the money is taken out - unless the corrupt were to bank them externally say in Swiss banks. What is helping public sector is chinese contractors - working day and night to deliver. Previously gov would contract our local or international contractors that had no capacity or financial muscle. You see the same kamikaze contractors in counties...When it come to credit growth - you need to understand that mobile lending has already overtaken the brick n mortar banks loans - I think Mshwari & KCB are doing something close to 150B - Mshwari alone lends I think close to 100B. And we have 50 digital credit service providers filling the gaps that high interest loans were doing.

In short don't worry - the economy is fine.

Again we need to accelerate public investment. I hope Jubilee can really borrow a leaf from Ethiopia. Ethiopia are growing at 8-10% for nearly 30yrs just banking on public investment.

Right now we need to keep focusing on the BASICs. ROADS, PIPED WATER, SEWAGE, ELECTRICITY and RAILS. Gov need to establish a huge infrastructure fund...I would sell shares in Safaricom, KPA, National OIl, Kenya Pipeline, KAA, name any gov cash-cows - and put the money into infrastructure deficit fund - and borrow the remainder - and then go into construction binge all over the country of roads, rails, dams, hospitals, schools, colleges, universities and such basic infrastructure. That should see economy growing 10% for a decade.

Yes credit growth is being led by mobile lending. But at what interest rate? 90% annual for Mshari or 50% annual for kcb, those are shylocks rates. No business can prosper borrowing at that rate. Not to forget that those are small amounts(amount borrowed size not volume), micro.
How's ethiopia doing after debt driven building binge? Private sector in 2010-2012 averaged well above 6% and this could have accelerated to above 8%. Private growth leads to higher incomes, meaning people are better off. Corruption money is removed from the masses to individuals which means isn't effectively distributed and even worse it leads distortion of resource allocation. That's how we end up with real estate bubbles. Jubilee will point to how many km built,hospitals etc, but to kawaida mwananchi, entrepreneurs and businesses, we'll ask are we better off? No. Pundit you're a keysian, socialist, to you government is the solution. To me, its the problem.

[RV Pundit]

I have been a proponent of public investment - coz we know private sector can grow our economy at around 4% tops like previously - and now the extra 2% if coming from the mostly debt driven infrastructure driven. I think your complains are not captured on economic data - because they don't simply exists. The economy is doing fine at 6%. The corruption doesn't mean the money is taken out - unless the corrupt were to bank them externally say in Swiss banks. What is helping public sector is chinese contractors - working day and night to deliver. Previously gov would contract our local or international contractors that had no capacity or financial muscle. You see the same kamikaze contractors in counties...When it come to credit growth - you need to understand that mobile lending has already overtaken the brick n mortar banks loans - I think Mshwari & KCB are doing something close to 150B - Mshwari alone lends I think close to 100B. And we have 50 digital credit service providers filling the gaps that high interest loans were doing.

In short don't worry - the economy is fine.

Again we need to accelerate public investment. I hope Jubilee can really borrow a leaf from Ethiopia. Ethiopia are growing at 8-10% for nearly 30yrs just banking on public investment.

Right now we need to keep focusing on the BASICs. ROADS, PIPED WATER, SEWAGE, ELECTRICITY and RAILS. Gov need to establish a huge infrastructure fund...I would sell shares in Safaricom, KPA, National OIl, Kenya Pipeline, KAA, name any gov cash-cows - and put the money into infrastructure deficit fund - and borrow the remainder - and then go into construction binge all over the country of roads, rails, dams, hospitals, schools, colleges, universities and such basic infrastructure. That should see economy growing 10% for a decade.

Yes credit growth is being led by mobile lending. But at what interest rate? 90% annual for Mshari or 50% annual for kcb, those are shylocks rates. No business can prosper borrowing at that rate. Not to forget that those are small amounts(amount borrowed size not volume), micro.
How's ethiopia doing after debt driven building binge? Private sector in 2010-2012 averaged well above 6% and this could have accelerated to above 8%. Private growth leads to higher incomes, meaning people are better off. Corruption money is removed from the masses to individuals which means isn't effectively distributed and even worse it leads distortion of resource allocation. That's how we end up with real estate bubbles. Jubilee will point to how many km built,hospitals etc, but to kawaida mwananchi, entrepreneurs and businesses, we'll ask are we better off? No. Pundit you're a keysian, socialist, to you government is the solution. To me, its the problem.

microloan have their space..help folks go thro emergencies without selling their assets.I think you make a big deal about gov.at best they control 20% of gdp.