Jubilee economic crimes

[Nefertiti]

Yes - you're making point. The tangible achievements don't need big China or Eurobond debt. They are child mortality, free maternity, ease of doing business. These solid mashinani achievements I happily concede to Jubilee.

The "crimes" in these thread are about wasted debt money. The borrow-build-grow model is a LIE.

Irrelevant NASA propaganda that is far from OBJECTIVE.

 Jubilee if they had done nothing won't have won by 55% and nearly 200mps. Jubilee has done a good job - they slashed child mortality by half I think - among many other great achievements. They are now embarking on universal health care.

Look at Ease of Doing Business - from highs of 100s - we are now nearly at 50! Only Rwanda and Mauritus are better than us in Sub-Saharan Africa.

For more projects...

https://www.delivery.go.ke/

My point is there is no Jubilee project completed with a positive return yet. All we have for sure is a massive debt. The rest are details.

[RV Pundit]

When did it become a crime to borrow. Demonstrate wastage?.

Jubilee biggest borrowing was SGR (total nearly 5B dollars) - if you think investing in modern rail - is wastage - then you cannot possibly be helped. We still need to borrow another 5B to get the line to Malaba. If Uhuru is afraid to do that - Ruto will do it the first month of his presidency if he wins.

Ndii talks about power - where is the wastage - when most of power coming online is done by private investors? Jubilee has added more than 30% power capacity - possibly 50% if you factor the retired expensive diesel generators.

Where is the wastage? We borrowed Eurobond which is cheap than loans from Kenya banks and also freezes those banks to lend to business.

I mean where is the wastage when economy has grown at average of 6% the last six years of Jubilee (5.9%,5.4%,5.7%,5.9%,4.9% and this 2018 will definitely be 5.8% or about). That is around 5.7%.

Kibaki in 2003-2012  economic growth was at 4.63 per cent annual average - before rebasing. Jubilee has done 1% more than kibaki did - Kibaki who started from a very low base of -1.7% of Moi's KANU.

Kibaki borrowed to 45% of GDP - Jubilee has taken that figure to nearly 60% - but Kibaki remember bridged the budget deficit by selling KENGEN, KENRE, MUMIAS, SAFARICOM, TELCOM and others.

The "crimes" in these thread are about wasted debt money. The borrow-build-grow model is a LIE.

[hk]

When you have strong economic growth averaging 6% plus strong currency against usd; then nominal gdp has no option but reach 100B this year.

As for taxes..in 2013 - KRA collected -759.5B. In 2018 KRA collected 1.5 trillion Kshs. That is about what % of growth again. This year it will probably hit 1.6 trillion (16B)...with total revenues (including AIA) exceeding 20B dollars.

Let us stick to FACTS. Don't play Ndii politics dressed as economics.

When Kibaki was PORK - Gov was collecting 700B in 1yr - now in 5 months ONLY - Jubilee are collecting about the same money.

in the five months from July to December, the Kenya Revenue Authority (KRA), the tax-collecting agency, only raised Sh681 billion.

But yes with Raila entering with his confusion - and all the noise - expect the economy to tank to 4% from rest of Jubilee regime. Already so far gov expenditure has grinded to halt as confusion and counter-accusation continues.Now we are going to worry about who get 10% of project money as bribe - instead of executing delivering projects that affect many people.

Instead of building rails, roads, dams, power stations, pipelines and such - we are busy witchhunting and killing projects - that can transform this country - and pay back the '5-10%' bribe money in a year.

Jubilee has been a disaster, and the sad thing is we're just entering the worst part. Unwinding the debts, curtailing wanton corruption will take a huge toll on the economy. Reviving the economy will be a tall order. Jubilee is about to become even more unpopular.  For economy to grow from 50b to 100b in 7yrs it means the economy has to average 12.5% gdp growth. The economy hasn't be growing at that rate, one can check kra collection, even with higher taxes, the collection hasn't doubled. It simply means jubilee inherited a bigger economy than previous stated. After rebasing the economy that would be apparent.

My bad, I used the wrong metric. With increased government spending kra was bound to collect more. Because every time government spends, taxes are automatically deducted. The government borrows, spends and taxes is deducted. In nutshell its like moving money from one pocket to the other.
The debt tenure is shorter, e.g this yr. we need to pay $10b. Most of that will be rolling over debt at higher rates. Its just a matter of time before the walls start collapsing.

[RV Pundit]

That doesn't sound right - you mean 1/5 of our total debt need to be repaid this year. The figure I know is around 4.5B - and treasury are doing fine - extending the tenor of most of the loans. We are far from a debt crisis but we need to stop borrowing - but not stop public expenditure - and we can only do that by kick-starting privatization of some of our jewels like Safaricom.

The debt tenure is shorter, e.g this yr. we need to pay $10b. Most of that will be rolling over debt at higher rates. Its just a matter of time before the walls start collapsing.

[Nefertiti]

hk is quite right.. need to tabulate the math for Pundit.. am just so busy. New revenues are way lower than the debt repayments. Jubilee has mortgaged Kenya.

[Nefertiti]

If economic growth was that easy - just borrow and build stuff - there would be very few undeveloped or poor countries. You need to be very disciplined, very economical - very frugal - with slavish wages and cheap power and loans. You need to EARN serious revenues through BIG exports. It's why communist China differs with Kenya so much - iron-fisted command economy where Xi orders everyone to go green and they do pap. China and the Tigers are everything corrupt, inefficient, over-consuming Jubilee-led Kenya is not.

It's why I laugh about Uhuru retire with happy legacy - what legacy? He should retire in shame.

[Nefertiti]

And of course once we demo the sad math of Jubilee waste - that the China model is inapplicable to Kenya - you just have to accept that we cannot go "China model" and therefore don't need one efficient super-Ruto. to fix our problems. Kenya is the opposite of China and we need a different approach - including taming if not ending the wanton theft that Ruto excels in.

William Ruto is a problem not a solution.

[RV Pundit]

Classic strawman arguments. Who talked about China. Is China the only model? Is the Asian tigers the only model out there? Chile developed under corrupt dictatorial regime of Pinochet. Indonesia made great strides under the uber-corrupt Suharto.Kenya is a thriving swamp of corruption if you compare it with it's peers in Sub-Saharan Africa.

What we need to do to develop is simple to me. Fix our Infrastructure deficit. Fix our social deficit. We need to fix both by massively investing in public sector. I am talking massively investing in paved roads, clean running water, electricity transmission, sea ports, lake ports, airports, power plants & irrigation schemes and then continue to invest in our people - esp basic needs - education, health and housing - and assist those who are poor, disabled and vulnerable. And of course security, law & order.

I believe everything else is in place to see kenya grow to proper middle class country. We have dealt with nearly all the other issues - what is just remaining from gov is to make sure everyone has paved all-weather road from their homes (still very BAD - 15-20% of all roads are paved), are connected to clean piped water and sewage if urban (still very BAD), have electricity supply to their doorstep (Now largely fixed) and maybe throw rails, oil pipelines, ports and such as extras.
 
If I was president - I would start Infrastructure Deficit Fund - and engage in world most extensive road constructions, dam constructions, ports & railways construction. Where will I get the money - I would sell those 30% share in Safaricom - easily earning 4-5B dollars - then flog another 30-49% of all these cash-cows - KAA, KPA, KPL,KCB,NOCK - each of those are capable of each netting 500-1B dollars. These gov cash cows if sold can easily earn our gov anything 10-15B dollars. I would then borrow from Chinese another 10-15B dollars. That should get us clean 30B dollars to bridge our infrastructure deficit.

After that - we should let trickle-down market economics to do it magic. Gov will just maintain the existing infrastructure and repay the loan going forward.

And of course once we demo the sad math of Jubilee waste - that the China model is inapplicable to Kenya - you just have to accept that we cannot go "China model" and therefore don't need one efficient super-Ruto. to fix our problems. Kenya is the opposite of China and we need a different approach - including taming if not ending the wanton theft that Ruto excels in.

William Ruto is a problem not a solution.

[RV Pundit]

Heck if the money is not enough - the next Pres Ruto - should also sell Nairobi  National Park - and put the money in the Infrastructure Deficit fund - and make sure - nobody is a kilometer away from a tarmac road, doesn't have clean piped water or electricity - and all that goes for modern basic infrastructure every citizen is entitled from it's gov. After he is done with Gov job to supplying basic infrastructure - the private sectors and private citizens will have no option except use it for their economic advancement.

[Nefertiti]

You rode the "China model" until recently when we showed how different it is from Kenya. To justify Jubilee's mega projects. You're equally wrong to quote Chile and Indonesia. I mean how is Kenya special? Out of say 50 corrupt countries - if 2 succeed and 48 fail - 4% success rate that a corrupt country can grow fast - which is more likely? Can you point out the 4% and argue corruption is not a BIG negative? While in truth Kenya is already part of the 96% failures. Just so you can say your infamously corrupt hero is the midas touch we need.

[hk]

Chile and indonesia also employed free markets, limited debt to curb inflation etc. This is what berkeley mafia did to turn around indonesia economy https://en.m.wikipedia.org/wiki/Berkeley_Mafia . Jubilee has done exactly opposite. The chicago boys in chile offered the same prescription, with increased deregulation and liberalization. Going on inflated infrastructure binge doesn't translates to poverty reduction (i.e. rising incomes). 

[Nefertiti]

Chile and indonesia also employed free markets, limited debt to curb inflation etc. This is what berkeley mafia did to turn around indonesia economy https://en.m.wikipedia.org/wiki/Berkeley_Mafia . Jubilee has done exactly opposite. The chicago boys in chile offered the same prescription, with increased deregulation and liberalization. Going on inflated infrastructure binge doesn't translates to poverty reduction (i.e. rising incomes).

Yup - Chile and Indonesia have only corruption in common with Kenya - we are poorer despite brand new shiny roads and rail. Their growth approach we are miles apart. It's also a big lie that PORK can be individually efficient and this trickles down to the economy. Any fool can borrow and build including old, lame Kibaki. There is in fact no trickle-down productivity - But there is trickle-down corruption - wizi - because of the symbolism. That's why you have incompetent CS Echesa printing fake cash - cos his boss is a thief  - while he is not as efficient.

[Kim Jong-Un's Pajama Pants]

Chile and indonesia also employed free markets, limited debt to curb inflation etc. This is what berkeley mafia did to turn around indonesia economy https://en.m.wikipedia.org/wiki/Berkeley_Mafia . Jubilee has done exactly opposite. The chicago boys in chile offered the same prescription, with increased deregulation and liberalization. Going on inflated infrastructure binge doesn't translates to poverty reduction (i.e. rising incomes).

Yup - Chile and Indonesia have only corruption in common with Kenya - we are poorer despite brand new shiny roads and rail. Their growth approach we are miles apart. It's also a big lie that PORK can be individually efficient and this trickles down to the economy. Any fool can borrow and build including old, lame Kibaki. There is in fact no trickle-down productivity - But there is trickle-down corruption - wizi - because of the symbolism. That's why you have incompetent CS Echesa printing fake cash - cos his boss is a thief  - while he is not as efficient.

Chile also had some interesting dynamic with the US, involving active sabotage, similar to Venezuela prior to Pinochet.  Indonesia had an oil windfall(and is generally worse off compared to its neighbors Malaysia and Singapore).  There are more complex dynamics at play than just a corrupt strongman and profligate borrowing and spending.

[RV Pundit]

And that is my prescription - sell more public assets - to fund public investment in infrastructure and it's people. And yes if there are cheap available credit like the Chinese are dolling out - take advantage of it. Our macro-economics looks good. 

I think gov job is to provide services - roads, electricity, name it  - and for people to take advantage of that to grow their incomes & get out of hunger and poverty.If the economy wasn't growing at 6% plus like this year - you'd fault the Jubilee gov - but the economy is clearly doing very well - people are definitely living better with all low volume seal roads, all electricity connections, with gov taking care of secondary education (we are nearly attaining 100% secondary transition!!!!!!!!!!!), TIVET are admitting 200k - and soon it will be 400k.

Obviously we have reached the limit of our prudent borrowing - but we should not reach the limit of public investment with such deficit.

Chile and indonesia also employed free markets, limited debt to curb inflation etc. This is what berkeley mafia did to turn around indonesia economy https://en.m.wikipedia.org/wiki/Berkeley_Mafia . Jubilee has done exactly opposite. The chicago boys in chile offered the same prescription, with increased deregulation and liberalization. Going on inflated infrastructure binge doesn't translates to poverty reduction (i.e. rising incomes). 

[RV Pundit]

Nigeria had about the same oil as Indonesia and same corruption - but fared badly. And only Chile out of many latin american countries made to the developed world despite adopting the same and being pro-US.

When China was developing - and WE DID ARGUE HERE endlessy - a decade go - you guys were saying the same thing - no way CHina can develop without DEMOCRACY.

There is a way a country can develop without democracy or with corruption. And that way is for gov to get stuff done. I don't care if they are democratic or not - corrupt or not - they need to get stuff done. You can have Raila talking a storm like Onyango Oloo but you know - how that ends - in POVERTY - or you can have someone like Ruto who wakes up at 5am and sleeps at 10am after getting lots of shiet done. I don't care if at end of the process he reward himself with 35B dollars like Suharto. Kenya economy by then would be worth 1 trillion.

Look at TZ - they tick all the boxes - but remain poorer and more pathetic than Kenya in nearly any index.

Chile also had some interesting dynamic with the US, involving active sabotage, similar to Venezuela prior to Pinochet.  Indonesia had an oil windfall(and is generally worse off compared to its neighbors Malaysia and Singapore).  There are more complex dynamics at play than just a corrupt strongman and profligate borrowing and spending.

[RV Pundit]

Bad workwoman blames her tools.why are the mugendias,rutos,magohas,matiangias,michukis,nyachaes and even biwotts able to get stuff done. But we prefer preachers against corruption and other ism - who happen to very lazy fools who just know how to talk a storm. That is probably from my dad...who describes most preachers....as that ilk...incredibly lazy fools with gift of gab...like most of our politicians.

What we need is as country is people like magohas, rutos, matiangis and mugendias to get stuff done...to get things moving..otherwise you find lots of people who just come with rehearsed speeches like Raila - we are at CROSS-ROADS - change the constitution - ohoo corruption is the problem.

The problem most of the time is Africa laziness. Indians and Chinese come here and thrive with all the isms....and you find them sloughing the long hours. Bazungu is a work ethic automaton. Bazungu is where he is because he sweat it out... he gets shit done. Mwafrika is out there looking for magic bullet from traditional witches or modern day witches like Raila.

And of course once we demo the sad math of Jubilee waste - that the China model is inapplicable to Kenya - you just have to accept that we cannot go "China model" and therefore don't need one efficient super-Ruto. to fix our problems. Kenya is the opposite of China and we need a different approach - including taming if not ending the wanton theft that Ruto excels in.

William Ruto is a problem not a solution.

[Nefertiti]

We agree government job is to get stuff done. It is which are the important services or "stuff" we discuss. Free pri + sec education, 100% transition, TIVET - are big milestones - again no big loans. Do you see the obvious? The clear wins need no heavy borrowing - they raise productivity without costing an arm and a leg.

The megaprojects - SGR, Galana, etc - would only make sense if
a) not build on debt and/or
b) produce enough cashflow to breakeven i.e. even if you sell parastatals the ROI must be bigger than Safcom or Kengen dividends

You can tell this is not the case by rise in debt-to-GDP ratio - 20% to 60% - shows the Jubilee debt repayments are 3X the increase in productivity. Bigger GDP means nothing when the net revenues are less. Try Net Domestic Product (NDP). Jubilee's NDP is actually -ve. We are poorer.

Doing the right stuff obviously does not take hyperactive PORK - like Moi or Ruto going to office at 5AM - just the correct priorities. Sickly old Kibaki still delivered.

And that is my prescription - sell more public assets - to fund public investment in infrastructure and it's people. And yes if there are cheap available credit like the Chinese are dolling out - take advantage of it. Our macro-economics looks good. 

I think gov job is to provide services - roads, electricity, name it  - and for people to take advantage of that to grow their incomes & get out of hunger and poverty.If the economy wasn't growing at 6% plus like this year - you'd fault the Jubilee gov - but the economy is clearly doing very well - people are definitely living better with all low volume seal roads, all electricity connections, with gov taking care of secondary education (we are nearly attaining 100% secondary transition!!!!!!!!!!!), TIVET are admitting 200k - and soon it will be 400k.

Obviously we have reached the limit of our prudent borrowing - but we should not reach the limit of public investment with such deficit.

[Nefertiti]

Great pitch. Explain how "lazy" Kibaki managed to grow the economy? Or he just picked from Moi bottom. Raila and Ruto have never been president - CEO - but they both shared some power - that's all we have to go on.

Bad workwoman blames her tools.why are the mugendias,rutos,magohas,matiangias,michukis,nyachaes and even biwotts able to get stuff done. But we prefer preachers against corruption and other ism - who happen to very lazy fools who just know how to talk a storm. That is probably from my dad...who describes most preachers....as that ilk...incredibly lazy fools with gift of gab...like most of our politicians.

What we need is as country is people like magohas, rutos, matiangis and mugendias to get stuff done...to get things moving..otherwise you find lots of people who just come with rehearsed speeches like Raila - we are at CROSS-ROADS - change the constitution - ohoo corruption is the problem.

The problem most of the time is Africa laziness. Indians and Chinese come here and thrive with all the isms....and you find them sloughing the long hours. Bazungu is a work ethic automaton. Bazungu is where he is because he sweat it out... he gets shit done. Mwafrika is out there looking for magic bullet from traditional witches or modern day witches like Raila.