Pundit, budget has 20% deficit not 5%

[Nefertiti]

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613B out of 3.02T will be borrowed.

This year, the budget deficit will stand at Sh607.8 billion. Treasury hopes to plug this by borrowing Sh324.3 billion from the external markets and Sh289.2 billion will come from the domestic markets.

In total, it will therefore borrow Sh613

https://mobile.nation.co.ke/business/How-Henry-Rotich-will-share-Sh3trn-pie/1950106-5155274-item-1-tgdfy4/index.html

[hk]

Actually it will be bigger than that in real figures cause kra wont collect 2.1t.

[Kadudu]

KRA will collect around 1.4t by end of this financial year. How can it collect next year 2.1t? Mission impossible. Most likely the deficit will be around 1.2t.
As Pundit will say, the economy is growing, so no problem.

Actually it will be bigger than that in real figures cause kra wont collect 2.1t.

[RV Pundit]

We are debt refinancing. We intend to borrow 6B dollars and we intend to repay 6B dollars. KRA will miss their target by small margin - they are normally around 90% of target - but there will also be development projects that get delayed because of procurement challenges & courts.

We have fund absorption problem. Even if Rotich availed all the 30B dollars - our gov doesn't have the ability to spend it all in one year. We need to work on that. Counties and CDF projects are visible because they don't have serious absorption problems like most gov agencies.

[Georgesoros]

We are debt refinancing. We intend to borrow 6B dollars and we intend to repay 6B dollars. KRA will miss their target by small margin - they are normally around 90% of target - but there will also be development projects that get delayed because of procurement challenges & courts.

We have fund absorption problem. Even if Rotich availed all the 30B dollars - our gov doesn't have the ability to spend it all in one year. We need to work on that. Counties and CDF projects are visible because they don't have serious absorption problems like most gov agencies.

I used to do debt refinancing left and right some time back, then realized that all I was paying was interest. I had to go on a strict budget.

[Nefertiti]

I used to do debt refinancing left and right some time back, then realized that all I was paying was interest. I had to go on a strict budget.

In short you cannot borrow & build yourself out of poverty. Effectively you wind up poorer. Any wealth is created by economical application of capital, raw materials and other resources. The Chinese manufactured themselves out of poverty. There is no convincing borrow & build story without some serious enterprise or natural windfall.

Ergo, our local 'genius' hustler is in fact an idiot.

[hk]

We are debt refinancing. We intend to borrow 6B dollars and we intend to repay 6B dollars. KRA will miss their target by small margin - they are normally around 90% of target - but there will also be development projects that get delayed because of procurement challenges & courts.

We have fund absorption problem. Even if Rotich availed all the 30B dollars - our gov doesn't have the ability to spend it all in one year. We need to work on that. Counties and CDF projects are visible because they don't have serious absorption problems like most gov agencies.

Budget deficit=revenue(kra collection)-expenditure + interest on debt . The ideal budget deficit to gdp should be 3% at the current rate it will be 8%. That's the percentage Ghana was before collapse of 2014. Already after the budget reading the shilling has weaken to trade at 104.  I am sure CBK will rush to defend the KES but CBK doesn't have the firepower since major USD denominated debt has to be paid. If this continues expect kenya to enter into an IMF economic program.

[RV Pundit]

Deficit has fallen to 5.3% - and it will fall - further - and we can begin leveraging. I am disappointed that Uhuru is not thinking about privatize more and deepening the capital exchange. NSE can be source of forex.It's obvious our export won't be growing soon.

There is no usd crisis - we just got eurobond dollars - that will take care of eurobond interest payments.

Don't be a pessimistic.

Budget deficit=revenue(kra collection)-expenditure + interest on debt . The ideal budget deficit to gdp should be 3% at the current rate it will be 8%. That's the percentage Ghana was before collapse of 2014. Already after the budget reading the shilling has weaken to trade at 104.  I am sure CBK will rush to defend the KES but CBK doesn't have the firepower since major USD denominated debt has to be paid. If this continues expect kenya to enter into an IMF economic program.

[RV Pundit]

Debt can be a leverage. It gives you the capital you don't have.

In short you cannot borrow & build yourself out of poverty. Effectively you wind up poorer. Any wealth is created by economical application of capital, raw materials and other resources. The Chinese manufactured themselves out of poverty. There is no convincing borrow & build story without some serious enterprise or natural windfall.

Ergo, our local 'genius' hustler is in fact an idiot.

[hk]

Deficit has fallen to 5.3% - and it will fall - further - and we can begin leveraging. I am disappointed that Uhuru is not thinking about privatize more and deepening the capital exchange. NSE can be source of forex.It's obvious our export won't be growing soon.

There is no usd crisis - we just got eurobond dollars - that will take care of eurobond interest payments.

Don't be a pessimistic.

Budget deficit=revenue(kra collection)-expenditure + interest on debt . The ideal budget deficit to gdp should be 3% at the current rate it will be 8%. That's the percentage Ghana was before collapse of 2014. Already after the budget reading the shilling has weaken to trade at 104.  I am sure CBK will rush to defend the KES but CBK doesn't have the firepower since major USD denominated debt has to be paid. If this continues expect kenya to enter into an IMF economic program.

It hasn't fallen to 5.3%, that was the projection but not reality. Yes there are usd to rollover earlier eurobond. But CBK doesn't have enough USD to defend the KES.  Why did the shilling all of sudden weaken thursday went down again friday and today  its 104 from 100.5? Government need to privatize everything not necessarily to raise forex but also free up the economy from government interference. Instead of privatizing and closing banks, Rotish is busy trying to establish a biashara bank.

[Nefertiti]

Debt can be a leverage. It gives you the capital you don't have.

In short you cannot borrow & build yourself out of poverty. Effectively you wind up poorer. Any wealth is created by economical application of capital, raw materials and other resources. The Chinese manufactured themselves out of poverty. There is no convincing borrow & build story without some serious enterprise or natural windfall.

Ergo, our local 'genius' hustler is in fact an idiot.

[RV Pundit]

Yes Rotich lack of imagination is to blame. I wish they could get Biwott daughter - Ms Koimett - to be finance minister so he can re-work kimunya magic and put many of these parastals on fire-sale.

It hasn't fallen to 5.3%, that was the projection but not reality. Yes there are usd to rollover earlier eurobond. But CBK doesn't have enough USD to defend the KES.  Why did the shilling all of sudden weaken thursday went down again friday and today  its 104 from 100.5? Government need to privatize everything not necessarily to raise forex but also free up the economy from government interference. Instead of privatizing and closing banks, Rotish is busy trying to establish a biashara bank.

[RV Pundit]

What are you try to say. Many business or wealth have been built from DEBT. In fact nearly all.

Debt can be a leverage. It gives you the capital you don't have.

In short you cannot borrow & build yourself out of poverty. Effectively you wind up poorer. Any wealth is created by economical application of capital, raw materials and other resources. The Chinese manufactured themselves out of poverty. There is no convincing borrow & build story without some serious enterprise or natural windfall.

Ergo, our local 'genius' hustler is in fact an idiot.

[hk]

Predictably the shilling has opened at 104 https://www.reuters.com/finance/currencies/quote?srcCurr=KES&destCurr=USD . Maybe CBK will intervene to halt further slide but the writing is on the wall.