We have always tried to explain Kenya's debt situation to some people

[Synod]

I said the $10B could build industries...all we would need is a market for those products and we would have paid back the loan very fast...

When you say this, bear in mind that Kenya has signed the EPA agreement, and if the terms remain as they are, there won't be reliable market for such industries. because Chiep but quality products from Europe will flood the Kenyan market, and of course the EA!

I think you need to reconsider it!

 

[Mwanzi1]

We insist that 50% debt to Gdp ratio is very manageable for a fast growing economy like Kenya.

U shldnt be talking about the Kenya's debt situation as though it is the worst case ever, there are surely several other countries in Africa with much heftier debts, relative to their Gdp, of upto 100%.
Other countries elsewhere in the world are grinding at 250% govt debt to the gdp ratio, i.e. Japan. I wasnt aware about America's 500% debt, I am quite stunned reading that, cos all along I have always assumed Japan has the highest debt relative to the size of its gdp.

Consider that in Kenya, much of that money has been invested into revenue generating projects, rather than being expended on health servicses, education, or paying the civil workforce, the mistake so many countries have been forced, owing to economic substances to make.

I am not saying that health, education, or paying the govt workers are not important and necessary, however, funding for these using borrowed money is very unwise, the country is bound for bankraptcy.

About America, it doesnt matter how powerful it is and what they own or have accomplished. 500%? The size of its debt is extremely immense. Surely, even if they were to liquidate all their assets, their total value would not be equal the 500% of 17.5trln! Tell me what is that number.

America is not too great to collapse.

If you take SGR loan out of the equation (which no one had access to it, but if they did ....only God knows what would've happen maybe another mall in Somewhere Street haha) the rest of the borrowing is either an accounted for or imewekwa kwenye over inflated projects. You keep forgetting why were questing this borrowing, Kenya is in EAC, EAC has a protocol of single currency. How could we achieve that with level of borrowing Kenya is undertaking haraka haraka. Au Kenya is doing this deliberately so that single currency will not be archived because Kenya will stand to lose maana Kenya will have sacrifice part of her wealth. Is that the case.??

 

[Kobello]

TRUE, the debt is $40B or above...I think you understand it pretty well...I also think you do understand that this debt is sustainable and that it will not be a burden for our economy...hope I've answered ur query? anyway, lemme now ask...whats ur take on Kenya's debt? do you think it is sustainable or not? and also do you think the loans being taken will yield any long-term benefits or they will develop into an unsustainable debt and prove to be a strenuous undertaking for our economy?

The debt is sustainable still, but the trend is disturbing - to Kenyans, of course - cos the projects underway are unnecessarily massive and don't seem to yield any long-term benefits.

The SGR is too dependent on Rwanda and Uganda. So is the Lamu port (big chunk of it taken by Tanga), and with the instability shown by Juba, the whole idea of running into Chinese soft loans eliminated the geopolitics of East African region.

Kenyans are very poor when it comes to geopolitics. They tend to overrate their position in the politics of this region and Africa as a whole and that is a very costly mistake done by Uhuru. He's so seventies when it comes to regional politics and he never learns.

 

[KeMzalendo]

Kenya's debt is growing. The single project of sgr has pushed it up by close to $10b. Is it good debt, definitely.
So instead of using our own money (capital investment), we can spread that payment over a couple of years plus a small interest. Happy tzanians.
Next we borrow and build the crude oil pipeline, there again, we enjoy the benefits if long term payment.
I just love my country. Meanwhile we use our taxes to improve our healthcare, education, security (social as well), subsidize the agricultural sector etc.
Tz has a mind set of govt controlling and setting up industry. Kenya is different. The govt creates an enabling environment. The sgr is one such enabler.
Wait for the next 5 year double digit economic growth ndio mtatii.

 

[Iconoclastes]

If you take SGR loan out of the equation (which no one had access to it, but if they did ....only God knows what would've happen maybe another mall in Somewhere Street haha) the rest of the borrowing is either an accounted for or imewekwa kwenye over inflated projects. You keep forgetting why were questing this borrowing, Kenya is in EAC, EAC has a protocol of single currency. How could we achieve that with level of borrowing Kenya is undertaking haraka haraka. Au Kenya is doing this deliberately so that single currency will not be archived because Kenya will stand to lose maana Kenya will have sacrifice part of her wealth. Is that the case.??

Kenya borrowed the money with the aim to boost its economic growth and development.

That it would risk borrowing such huge debts just to undermine the EAC, placing itself in a very inimical financial sitiation is absurd to the extreme. And such an absurd theory coming from u is puzzling.

Kenya is borrowing for the same goals as all the countries in Affrica and elsewhere in the world, for projects development or to offset some crisis, heck some of the money was probably used to settle the recent doctor's strike, and now the nurses have downed their tools.

Lie not to us that Tanzania is not seeking to borrow in order to actualize some of its pressing goals. Trouble is, its credit rankings is not doing it any good.

 

[lenpel]

America has a debt +500% of the GDP leave alone 50%

U are lying kijana very lying...having such huge margin could keep u in a junk rating by fitch, s&p and Moody...it could even affect their policy to the world especially financial policy in taxing, interest rate and could pull up inflations...it could even discourage investment and employment in USA for even over a decade o so...my friend read your sources properly...u are lying to us.

 

[lenpel]

Debt helped them do all that, and that is what Kenya will do when it has 500% Debt to GDP just like America

I guarantee you, ikizidi 50% mnakuwa rated junk na Fitch au moody's au S&P baaada ya hapo mnakuwa very risk kukopeshwa na mkikopeshwa hiyo interest hmtaiweza kabisa na ikikaribia 70% (manake mmeaccumulate debt na interest to the tune of 70% of GDP) Lazima mtadefault kulipa madeni yenu kama Mozambique mwaka jana December ambapo nadhani mnajua wadeni wenu watafanyaje...all ur asset anywhere in the world will be held even sold...na mkifika 500% hapo sisemi utajaza mwenyewe...!!

Mfanyaje basi, mnatakiwa muende kwenye mode ya kubana matumizi ya hali ya juu hamna jinsi 49.8% debt to GDp is to high at kama ni ceiling yenu...mreview budget yenu na zaidi mjikite kulipunguza hadi 30% in long term na 45% in short term muweze kufanya maendeleo hasa reli, bandari, airport na barabara lasi hivyo my friends u are financially doomed.

Very humble expertise opinion from ur East African neighbour, utani kuweka pembeni...!!!

 

[Iconoclastes]

The debt is sustainable still, but the trend is disturbing - to Kenyans, of course - cos the projects underway are unnecessarily massive and don't seem to yield any long-term benefits.

The SGR is too dependent on Rwanda and Uganda. So is the Lamu port (big chunk of it taken by Tanga), and with the instability shown by Juba, the whole idea of running into Chinese soft loans eliminated the geopolitics of East African region.

Kenyans are very poor when it comes to geopolitics. They tend to overrate their position in the politics of this region and Africa as a whole and that is a very costly mistake done by Uhuru. He's so seventies when it comes to regional politics and he never learns.

Correct! The debts are sustainable and (though u may not want to admit it), justified.

And the critics are right in their concern and skepticism regarding the feasibilty and envisaged returns of some of these mega- projects being funded thru the borrowed funds.
But the critics fears are (as always) wrong and unfounded. Some of of sentiments being bandied around by these "experts", opposing these govt development programs, are laced with tons of false information, obviously from the political opponents of the govt.

Theirs is to blacken any intentions of the govt, however noble; striving to find, and blowing out of all proportions any minor flaws that may occur during the process of the realization of the govt development programmes as evident corruption.

Lamu and Sgr are indeed dependent on the markets of Rwanda and Uganda and not forgetting Congo and SSudan and Ethiopia. Thus the mad scramble by Kenya and Tanzania to construct these transport infrastructure. But who btwn Kenya and Tanzania is really in the pole position as at now to bag those markets?
Let us watch Tanzania's projects flop.

And Kenya's starture in the region cannot be underestimated. Afterall, it accounts for nearly 45% of the EAC gdp, boasts of the most powerful military and the most foreign connections. U want to discuss geopoltics?

 

[Mwanzi1]

Kenya borrowed the money with the aim to boost its economic growth and development.

That it would risk borrowing such huge debts just to undermine the EAC, placing itself in a very inimical financial sitiation is absurd to the extreme. And such an absurd theory coming from u is puzzling.

Kenya is borrowing for the same goals as all the countries in Affrica and elsewhere in the world, for projects development or to offset some crisis, heck some of the money was probably used to settle the recent doctor's strike, and now the nurses have downed their tools.

Lie not to us that Tanzania is not seeking to borrow in order to actualize some of its pressing goals. Trouble is, its credit rankings is not doing it any good.

Tanzania chose not to be rated many years back, we knew we're not ready to join global credit hyenas. If you think Tanzania can not get any rating then your wrong. Our previous president Kikwete was asked in many occasion when will Tanzania get credit rating, the answers has always been ...when the condition are right for us. Kenya you stick your neck out and now your choking with debts. Credit rating gives you an appetite for borrowing, pushing the burden repayment to the future unborn children.

On the second point, when the time come and we all join a single currency, national debt will be number one thing on the table. You have to realize we will all end up sharing the burden of debt, but before we reach to that point, every country have to reduce there debt and budget deficit to the agreed level. Now if Kenya is going the way is going, is there any chance of getting single currency within the time frame agreed? considering Kenya will end up getting a hair cut on her economy by joining a single currency and also surrender her fiscal policy.

 

[lenpel]

Correct! The debts are sustainable and (though u may not want to admit it), justified.

And the critics are right in their concern and skepticism regarding the feasibilty and envisaged returns of some of these mega- projects being funded thru the borrowed funds.
But the critics fears are (as always) wrong and unfounded. Some of of sentiments being bandied around by these "experts", opposing these govt development programs, are laced with tons of false information, obviously from the political opponents of the govt.

Theirs is to blacken any intentions of the govt, however noble; striving to find, and blowing out of all proportions any minor flaws that may occur during the process of the realization of the govt development programmes as evident corruption.

Lamu and Sgr are indeed dependent on the markets of Rwanda and Uganda and not forgetting Congo and SSudan and Ethiopia. Thus the mad scramble by Kenya and Tanzania to construct these transport infrastructure. But who btwn Kenya and Tanzania is really in the pole position as at now to bag those markets?
Let us watch Tanzania's projects flop.

And Kenya's starture in the region cannot be underestimated. Afterall, it accounts for nearly 45% of the EAC gdp, boasts of the most powerful military and the most foreign connections. U want to discuss geopoltics?

You are busy watching us flop, in what exactly...since 1995 our economy has underwent a turnaround...we had a budget collection of 40-50% internally funded now we are 70% internally funded and the gap is widely closing...it seems nothing to u but in the long term we will bag each and everything u think we wont have...you dd say our railway is a white elephant and now we are constructing it electrically and cheaply than you and when complete it will cover a total of 2136 KM in length electrified. U always boost as the best but watch us...as we bagged the pipeline we will bag all we deem strategically important to us, our country...for us its country first now...u used to belittle us with ur airline we now have revived ours and with this no single visa cz we will bag all tourist to us ourselves no sijui JKIA it will be KIA o JNIA flocking with tourists and when u are still boosting we will build the biggest port on the Eastern Seaboard of Africa...Bagamoyo port + it fellow Mwambani port link it to the central and Northern line through Arusha to Musoma and Isaka and Tunduma to the south...as u still will be boosting we will build and extract all the gas our precious God gave us in the oceans by that tym we will have enough FDI and hard currency to transform our social ans economic structure...Belittle us when u have tym...we are silent but soon my friend soon...u will be amazed...hii co Tanzania ya Nyerere au Mwinyi...kila cku tunachange na kuadopt

 

[Kobello]

Correct! The debts are sustainable and (though u may not want to admit it), justified.

And the critics are right in their concern and skepticism regarding the feasibilty and envisaged returns of some of these mega- projects being funded thru the borrowed funds.
But the critics fears are (as always) wrong and unfounded. Some of of sentiments being bandied around by these "experts", opposing these govt development programs, are laced with tons of false information, obviously from the political opponents of the govt.

Theirs is to blacken any intentions of the govt, however noble; striving to find, and blowing out of all proportions any minor flaws that may occur during the process of the realization of the govt development programmes as evident corruption.

Lamu and Sgr are indeed dependent on the markets of Rwanda and Uganda and not forgetting Congo and SSudan and Ethiopia. Thus the mad scramble by Kenya and Tanzania to construct these transport infrastructure. But who btwn Kenya and Tanzania is really in the pole position as at now to bag those markets?
Let us watch Tanzania's projects flop.

And Kenya's starture in the region cannot be underestimated. Afterall, it accounts for nearly 45% of the EAC gdp, boasts of the most powerful military and the most foreign connections. U want to discuss geopoltics?

Justification based on good intentions of your government? Of course Yes. As of now, Kenya stands at a better position to serve the landlocked countries of Uganda and (to a certain degree) Rwanda which is a gateway to Goma. The distance from Dar/ Mombasa to Goma is almost the same and that's when the geopolitics will be at play.

Uganda is not really a factor here. Half of Uganda's imports is Oil and her exports are 40% destined to Kenya (valued at a bit more than half a billion dollars). In ten years, there will be no oil to and from Uganda passing through Kenya (to be diplomatic, there'll be few). So, Uganda herself isn't a factor.

The only resource-rich country here is Congo, and that's where the SGR is trying to reach. You can have Uganda minus oil and keep your share of Rwanda, but that's not what the Chinese are looking for. They have their eyes on resource-rich countries of Congo, Zambia and Tanzania. That's where "real" goodies will be hauled from.

Once the central line is hooked to Mchuchuma - Mbamba Bay, Lake Nyasa's Oil will go through Dar. At the same time, Congo wants a piece of Hoima - Tanga and we are currently exploring together in Lake Tanganyika.

To sum it up, it's the major "Potential energy" versus meager "Kinetic energy"

 

[MK254]

Kenya have been collecting below target for last 3 yrs. Kenyatta is lying to you guys, you can't have over 50% debt to GDP ratio and not raising eyebrows. I'm so surprised you actually believe this is suitable. For every Kshs 100 in the economy, Kshs 54 is owed to the creditors. There is no GoK has borrow in history compare to Jubilee gov. You said your better than your neighbors in revenue collection but they are not in debt as you, so the more you collect the more it goes to were it belongs which is creditors. And funny enough, there is no even plan on the table to plug the hole on wastage

The debt is unprecedented, so is our economic growth. Within president Uhuru's tenure, our economy has grown by almost 50%, we are now soaring at $75B

I have said this on several occasions, we have not surpassed the threshold in debt level to revenue ratio, we are also within the healthy levels of external debt service to export ratio which is at 14.8% against the threshold of 25%

Mind you, the current SGR will spur growth in many sectors, I wish I had the time to break it down to you in full what this massive infrastructure means to us. I will soon take my time and start a thread on this.

Our country is driven by vision 2030, any leader who ascends to the helm of the nation must remain within the aspirations of this vision. Listed below are what we are expected to achieve before 2030

A. ECONOMIC PILLAR

TOURISM SECTOR

1. Development of 3 resort cities two at the coast and one in Isiolo.
2. Premium Park Initiative.
3. Under Utilized Parks Initiative.
4. Development of Niche Tourism Products.

AGRICULTURE SECTOR

5. Enactment of the Consolidated Agricultural Reform Bill.
6. Fertilizer Cost-Reduction Initiative.
7. Setting up of five livestock Disease Free Zones in the ASAL regions.
8. Land registry.
9. Land use master plan.
10. ASAL Development Projects.

MANUFACTURING SECTOR

11. Development of Special Economic Zones in all the eight regions.
12. Development of 5 SME parks.

WHOLESALE AND RETAIL SECTOR

13. Build 1 free trade port in Mombasa in order to bring Dubai to Kenya.
14. Create at least 10 hubs and 1000-1500 Producer Business Groups (PBGs)- start with a pilot in Maragua.
15. Build at least 10 Tier 1 marks in all the regions - starting with a pilot in Athi River.

ICT AND BPO SECTOR

16 Establish one major BPO park

FINANCIAL SECTOR

17. Issuance of benchmark sovereign bond.
18. Pursue comprehensive remittances strategy
19. Develop and execute comprehensive model for pension reform.
20. Facilitate transformation towards stronger, larger scale banks.

B. POLITICAL PILLAR

GOVERNANCE, SECURITY AND RULE OF LAW

21. Constitutional initiatives.
22. Rule of law (Judicial, Legal reform initiatives and Security and Policing reforms).
23. Transparency and accountability (Develop a national programme on attitudinal change to inculcate a culture of compliance with the efficiency norms).
24. Building a non-partisan professional research centre to enrich Parliamentary law-making.

PUBLIC SERVICE REFORM

25. Establish Kenya School of Government.

C. SOCIAL PILLAR

POPULATION, URBANIZATION AND HOUSING SECTOR

26. To develop an integrated growth and development strategy for six metropolitan regions, Nairobi, Mombasa, Kisumu, Kakamega, Eldoret, Wajir, Garissa, Mandera, Kitui, Mwingi, Meru.
27. To develop a National Land Use Master Plan.
28. Enact the Housing Bill 2006.
29. Establish secondary mortgage Finance Corporation.
30. Produce 200,000 housing units annually.
31. Install physical and social infrastructure in slums in 20 urban areas.
32. Position the city of Nairobi as a 24 hour and all round globally competitive city in business and tourism.
33. Establish housing technology centers in each constituency to increase access to decent housing.

GENDER, YOUTH VULNERABLE GROUPS

34. Provide Funds to Women Entrepreneurs.
35. Increase women representation at executive level in all branches of the government and the private sector.
36. Sports: International Academy for Sports, Sports Lottery and sports stadias across the country.
37. Music: Establish International Centre for Arts and Culture and Programme to Identify, nature and Develop Music.
38. Expand the Youth Enterprise Development Fund.
39. Establish social protection fund for cash transfer to Orphans and Vulnerable children (OVC), persons with Disabilities (PWD) and elderly.
40. Full implementation of Disability Fund.

LABOUR AND EMPLOYMENT SECTOR

41. Development of Human Resource Database.
42. Productivity improvement, measurement and promotion.
43. Strategic management and coordination.
44. Transformation of National Social Secuty Fund (NSSF).
45. Develop and implement Diaspora policy.
46. Strengthen linkages between industry and institutions.
47. Identification of talents in education sector.
48. Retrain and redirect excess Human Resource

EDUCATION AND TRAINING SECTOR

49. Build at least one boarding school in each constituency in the pastoral regions.
50. Build and fully equip 560 new secondary schools.
51. Implement a computer supply programme.
52. Roll out a voucher system in five poorest districts.
53. Create centers of Excellence for key Vision 2030 sectors.
54. Undertake a teachers recruitment programme.

EQUITY AND POVERTY ELIMINATION

55. Develop an integrated national strategy to promote good governance and effectiveness of devolved funds.
56. Improve data collection to map out the spread of the poor throughout the country and to create profiles of the poor and their pressing needs.
57. Formulate targeted programmes and projects in light of the data profiles established.

SECURITY SECTOR

58. Establishment of forensic laboratory.
59. Installation of surveillance cameras in Nairobi, Nakuru and Kisumu.
60. Construction of six new prisions in Mwingi, Nyamira, Kwale, Rachuonyo, Vihiga and Kaloleni.
61. Establishment of a National Security Database

HEALTH SECTOR

62. Revitalize and integrate Community Health Centers to promote preventive health care.
63. De-link the ministry of Health from service delivery to allow independent operation of tiers 4, 5 and 6 (District, Provincial and National hospitals).
64. Create a mandatory National Health Insurance Scheme (with contribution from employers and employees).
65. Channel Health funds directly to health care centers (i.e. to hospitals and CHCs).
66. Scale up Output Based Approach (OBA) system.

C. ENABLERS & MACRO

ENVIRONMENT, WATER AND SANITATION

67. Tana and lake Victoria catchment initiatives.
68. Rehabilitate 600 hydro meteorological stations.
69. Develop two multi purpose water conservation structures along Nzoia and Nyando rivers.
70. Develop 24 medium sized multi-purpose dams.
71. Rehabilitate and augment Mzima pipeline.
72. Implement Tana Delta initiatives.
73. Expedite rehabilitation of the Bura irrigation scheme.
74. Implement sewage initiative.
75. Water catchment management.
76. Secure wildlife corridors and migratory routes.
77. Relocating of Dandora dumping site.
78. Land cover and land use mapping.

INFRASTRUCTURE SECTOR

79. Dredging and deepening of Mombasa port.
80. Rehabilitation and expansion of Kisumu Airport.
81. Nairobi Metropolitan region bus transit system.
82. Development of light rail for Nairobi and suburbs.
83. Development of new transport corridors.
84. Weather modification programme and Meteorological systems modernisation programme.
85. Construction industry development policy.
86. Public utility management system.
87. Rural electrification programmes.
88. Solar Electricity Generators to 74 public institutions.
89. Energy access scale-up programme.
90. Booster pump station for Nairobi – Mombasa pipeline.
91. Parallel pipeline from Nairobi to Eldoret.
92. Extension of 352km oil pipeline from Eldoret to Kampala.
93. Construction of LPG handling facility in Mombasa and Nairobi.
94. Appraisal drilling project to ascertain quality and viability of coal deposit in Mui Basin of Kitui and Mwingi.
95. Appraisal drilling at Olkaria and Wind power generation.
96. Co-generation of power in processing of sugar.
97. Implementation of 330KV transmission line project between Arusha and Nairobi.

 

[Iconoclastes]

You are busy watching us flop, in what exactly...since 1995 our economy has underwent a turnaround...we had a budget collection of 40-50% internally funded now we are 70% internally funded and the gap is widely closing...it seems nothing to u but in the long term we will bag each and everything u think we wont have...you dd say our railway is a white elephant and now we are constructing it electrically and cheaply than you and when complete it will cover a total of 2136 KM in length electrified. U always boost as the best but watch us...as we bagged the pipeline we will bag all we deem strategically important to us, our country...for us its country first now...u used to belittle us with ur airline we now have revived ours and with this no single visa cz we will bag all tourist to us ourselves no sijui JKIA it will be KIA o JNIA flocking with tourists and when u are still boosting we will build the biggest port on the Eastern Seaboard of Africa...Bagamoyo port + it fellow Mwambani port link it to the central and Northern line through Arusha to Musoma and Isaka and Tunduma to the south...as u still will be boosting we will build and extract all the gas our precious God gave us in the oceans by that tym we will have enough FDI and hard currency to transform our social ans economic structure...Belittle us when u have tym...we are silent but soon my friend soon...u will be amazed...hii co Tanzania ya Nyerere au Mwinyi...kila cku tunachange na kuadopt

You are deluded my friend.

Last time I checked, Tanzania is struggling to raise the finances to fund those big projects.
Bagamoyo, to the best of my knowledge is a long forgotten issue. It was a very misguided decision, jolted by your desire to be seen as a veritable rival to Kenya in terms of dominance in the region; this after Kenya initiated its Lamu port project.
U are instead focusing on expanding, and improving the ports of Dar and Tanga, and I am not even sure how far u have gone with the both projects.

And then again, the success of both Tanga and Dar ports will be predicated upon the successful realization of the Sgr, linking them with their targeted external clients in Burundi, Rwanda, Doctor Congo etc.

Looking at the situation however, all these projects, the Sgr in particular are in limbo!

JPM snubbed the Chinese offer to fund the Sgr, which was negotiated by the previous govt of JK, snached the deal from the Chinese and handed it to the Turks. The Chinese, in a huff pulled away their resources and bid u good luck with the Turks. But the Turks, unfortunaly, are not as moneyed as the Chinese, they wouldnt be able to fully fund your sgr project.

JPM turned to the WB, but they were only willing to finance the revamp of the old railway lines.
We now hear that JPM is so desperate, he actually had to turn to Zuma for help, to negotiate for loans on behalf of Tz from the Bric countries......which include China, incidentally.

The Chinese have stated thus very explicitly: that they would only fund the Uganda and Rwanda railway projects, provided they link up with the Kenyan one.

Oh Tanzania. Look at how Magufuli's impulsive decision making is messing u guys up, as well as the entire region. What if that pipeline deal with which Uganda is bound with Tanzania also unravels?

Uganda would be seriously messed up!

 

[Iconoclastes]

Justification based on good intentions of your government? Of course Yes. As of now, Kenya stands at a better position to serve the landlocked countries of Uganda and (to a certain degree) Rwanda which is a gateway to Goma. The distance from Dar/ Mombasa to Goma is almost the same and that's when the geopolitics will be at play.

Uganda is not really a factor here. Half of Uganda's imports is Oil and her exports are 40% destined to Kenya (valued at a bit more than half a billion dollars). In ten years, there will be no oil to and from Uganda passing through Kenya (to be diplomatic, there'll be few). So, Uganda herself isn't a factor.

The only resource-rich country here is Congo, and that's where the SGR is trying to reach. You can have Uganda minus oil and keep your share of Rwanda, but that's not what the Chinese are looking for. They have their eyes on resource-rich countries of Congo, Zambia and Tanzania. That's where "real" goodies will be hauled from.

Once the central line is hooked to Mchuchuma - Mbamba Bay, Lake Nyasa's Oil will go through Dar. At the same time, Congo wants a piece of Hoima - Tanga and we are currently exploring together in Lake Tanganyika.

To sum it up, it's the major "Potential energy" versus meager "Kinetic energy"

Read my response to lenpel above.

 

[Iconoclastes]

Tanzania chose not to be rated many years back, we knew we're not ready to join global credit hyenas. If you think Tanzania can not get any rating then your wrong. Our previous president Kikwete was asked in many occasion when will Tanzania get credit rating, the answers has always been ...when the condition are right for us. Kenya you stick your neck out and now your choking with debts. Credit rating gives you an appetite for borrowing, pushing the burden repayment to the future unborn children.

On the second point, when the time come and we all join a single currency, national debt will be number one thing on the table. You have to realize we will all end up sharing the burden of debt, but before we reach to that point, every country have to reduce there debt and budget deficit to the agreed level. Now if Kenya is going the way is going, is there any chance of getting single currency within the time frame agreed? considering Kenya will end up getting a hair cut on her economy by joining a single currency and also surrender her fiscal policy.

I can only speculate that Tanzania didnt wish to be rated due to the fact that it is not creditable in the first place.
Tanzania has benefitted a lot from the credits by these "hyenas" to cushion its desperate financial needs, and at one point they agreed to erase some of your debts you owe them.
Otherwise, your debt levels today could have been reading at 70% or 80% or +++%!

Tanzania was once a country very saddled with debts, which it was expected not to be able to repay due to the high levels of poverty and economic difficulties.

On the regional currency, Kenya is not on a borrowing spree in order to wilfully hamper the EAC's dream of having a single currency, an idea which I think would not be achieved at the near future given the prevailing circumstances.

 

[Geza Ulole]

We have always tried to explain Kenya's debt situation to some people in this forum. Not to claim that we are totally right, because debt is a gamble, we can only discuss based on the odds available.
This is a series of videos from around AUG 2016 to May 2017, all touching on Kenya's debt.




Sustainable is the word.

at 51% of the GDP end 0f 2016, if i were u i won't call that sustainable while right now is around 60%!

World Bank in fresh warning as Kenya’s debt hits Sh3.8 trn
Wednesday April 19 2017
email print

Treasury secretary Henry Rotich. FILE PHOTO | NMG

In Summary

• World Bank says borrowing to finance infrastructure projects should be balanced with the dire risks of overborrowing.
• Kenya has in the past four years borrowed billions of shillings to finance mega public infrastructure, including the ongoing construction of the standard gauge railway (SGR) line, power generation and road projects.
• Kenya’s total public debt stood at Sh3.827 trillion or 51.50 per cent of GDP in December 2016, according to latest data from the Treasury.

By BRIAN NGUGI
More by this Author
A rapid build-up of public debt in the past four years has put the Kenyan economy at the risk of turbulence, the World Bank warned on Wednesday, adding its voice to rising concerns over the possible impact of heavy borrowing on the country’s future.

World Bank Chief Economist for Africa, Albert Zeufack, and the bank’s Lead Economist, Punam Chuhan-Pole, said borrowing to finance infrastructure projects should be balanced with the dire risks of overborrowing.

“Any borrowing to support infrastructure projects should be done judiciously,” said Ms Chuhan-Pole when the bank presented the latest edition of Africa’s Pulse, a biannual analysis of the state of African economies.

Kenya has in the past four years borrowed billions of shillings to finance mega public infrastructure, including the ongoing construction of the standard gauge railway (SGR) line, power generation and road projects.

Recent forecasts indicate that the borrowings could soon take the debt load past 60 per cent of GDP.

Kenya’s total public debt stood at Sh3.827 trillion or 51.50 per cent of GDP in December 2016, according to latest data from the Treasury.

The World Bank’s warning comes at a time when mounting debt has dominated public discourse in Kenya and after several think tanks and experts expressed similar sentiments in recent months.

READ: Treasury pushes Kenya into more debt with fresh Sh82 billion loan

The International Monetary Fund (IMF) has urged Kenya to lower her budget deficit in order to keep the debt at manageable levels.

President Uhuru Kenyatta’s Jubilee government has, however, often remained defiant in the face of the warnings.

“Every year since the start of my administration, we have made adequate budgetary provisions to service the debt. I want to assure Kenyans that at no point has the country been at risk of default,” said Mr Kenyatta in mid-March.

The President repeated the defence of his government’s unprecedented accumulation of public debt during the State of the Nation address in March, saying the money will eventually spur economic growth.

“The money is not going towards payment of salaries or consumption but to projects that will spur economic growth and create employment,” he said.

To continue financing the ongoing and planned mega projects Kenya must reform its public investment mechanism to attract more private players, the World Bank said.

“The impact of public investment on economic growth can be improved if countries implement policies that make public investment more efficient,” said Ms Chuhan-Pole.

Mr Zeufack said that improving “institutions and procedures governing project appraisal, selection, and monitoring” could produce a sound public investment system for Kenya.

The latest Africa’s Pulse report shows economic growth in Sub-Saharan Africa is projected to grow at the rate of 2.6 per cent in 2017, following a deceleration in 2016.

World Bank warns Kenya of looming debt risk

 

[Mwanzi1]

The debt is unprecedented, so is our economic growth. Within president Uhuru's tenure, our economy has grown by almost 50%, we are now soaring at $75B

I have said this on several occasions, we have not surpassed the threshold in debt level to revenue ratio, we are also within the healthy levels of external debt service to export ratio which is at 14.8% against the threshold of 25%

Mind you, the current SGR will spur growth in many sectors, I wish I had the time to break it down to you in full what this massive infrastructure means to us. I will soon take my time and start a thread on this.

Our country is driven by vision 2030, any leader who ascends to the helm of the nation must remain within the aspirations of this vision. Listed below are what we are expected to achieve before 2030

A. ECONOMIC PILLAR

TOURISM SECTOR

1. Development of 3 resort cities two at the coast and one in Isiolo.
2. Premium Park Initiative.
3. Under Utilized Parks Initiative.
4. Development of Niche Tourism Products.

AGRICULTURE SECTOR

5. Enactment of the Consolidated Agricultural Reform Bill.
6. Fertilizer Cost-Reduction Initiative.
7. Setting up of five livestock Disease Free Zones in the ASAL regions.
8. Land registry.
9. Land use master plan.
10. ASAL Development Projects.

MANUFACTURING SECTOR

11. Development of Special Economic Zones in all the eight regions.
12. Development of 5 SME parks.

WHOLESALE AND RETAIL SECTOR

13. Build 1 free trade port in Mombasa in order to bring Dubai to Kenya.
14. Create at least 10 hubs and 1000-1500 Producer Business Groups (PBGs)- start with a pilot in Maragua.
15. Build at least 10 Tier 1 marks in all the regions - starting with a pilot in Athi River.

ICT AND BPO SECTOR

16 Establish one major BPO park

FINANCIAL SECTOR

17. Issuance of benchmark sovereign bond.
18. Pursue comprehensive remittances strategy
19. Develop and execute comprehensive model for pension reform.
20. Facilitate transformation towards stronger, larger scale banks.

B. POLITICAL PILLAR

GOVERNANCE, SECURITY AND RULE OF LAW

21. Constitutional initiatives.
22. Rule of law (Judicial, Legal reform initiatives and Security and Policing reforms).
23. Transparency and accountability (Develop a national programme on attitudinal change to inculcate a culture of compliance with the efficiency norms).
24. Building a non-partisan professional research centre to enrich Parliamentary law-making.

PUBLIC SERVICE REFORM

25. Establish Kenya School of Government.

C. SOCIAL PILLAR

POPULATION, URBANIZATION AND HOUSING SECTOR

26. To develop an integrated growth and development strategy for six metropolitan regions, Nairobi, Mombasa, Kisumu, Kakamega, Eldoret, Wajir, Garissa, Mandera, Kitui, Mwingi, Meru.
27. To develop a National Land Use Master Plan.
28. Enact the Housing Bill 2006.
29. Establish secondary mortgage Finance Corporation.
30. Produce 200,000 housing units annually.
31. Install physical and social infrastructure in slums in 20 urban areas.
32. Position the city of Nairobi as a 24 hour and all round globally competitive city in business and tourism.
33. Establish housing technology centers in each constituency to increase access to decent housing.

GENDER, YOUTH VULNERABLE GROUPS

34. Provide Funds to Women Entrepreneurs.
35. Increase women representation at executive level in all branches of the government and the private sector.
36. Sports: International Academy for Sports, Sports Lottery and sports stadias across the country.
37. Music: Establish International Centre for Arts and Culture and Programme to Identify, nature and Develop Music.
38. Expand the Youth Enterprise Development Fund.
39. Establish social protection fund for cash transfer to Orphans and Vulnerable children (OVC), persons with Disabilities (PWD) and elderly.
40. Full implementation of Disability Fund.

LABOUR AND EMPLOYMENT SECTOR

41. Development of Human Resource Database.
42. Productivity improvement, measurement and promotion.
43. Strategic management and coordination.
44. Transformation of National Social Secuty Fund (NSSF).
45. Develop and implement Diaspora policy.
46. Strengthen linkages between industry and institutions.
47. Identification of talents in education sector.
48. Retrain and redirect excess Human Resource

EDUCATION AND TRAINING SECTOR

49. Build at least one boarding school in each constituency in the pastoral regions.
50. Build and fully equip 560 new secondary schools.
51. Implement a computer supply programme.
52. Roll out a voucher system in five poorest districts.
53. Create centers of Excellence for key Vision 2030 sectors.
54. Undertake a teachers recruitment programme.

EQUITY AND POVERTY ELIMINATION

55. Develop an integrated national strategy to promote good governance and effectiveness of devolved funds.
56. Improve data collection to map out the spread of the poor throughout the country and to create profiles of the poor and their pressing needs.
57. Formulate targeted programmes and projects in light of the data profiles established.

SECURITY SECTOR

58. Establishment of forensic laboratory.
59. Installation of surveillance cameras in Nairobi, Nakuru and Kisumu.
60. Construction of six new prisions in Mwingi, Nyamira, Kwale, Rachuonyo, Vihiga and Kaloleni.
61. Establishment of a National Security Database

HEALTH SECTOR

62. Revitalize and integrate Community Health Centers to promote preventive health care.
63. De-link the ministry of Health from service delivery to allow independent operation of tiers 4, 5 and 6 (District, Provincial and National hospitals).
64. Create a mandatory National Health Insurance Scheme (with contribution from employers and employees).
65. Channel Health funds directly to health care centers (i.e. to hospitals and CHCs).
66. Scale up Output Based Approach (OBA) system.

C. ENABLERS & MACRO

ENVIRONMENT, WATER AND SANITATION

67. Tana and lake Victoria catchment initiatives.
68. Rehabilitate 600 hydro meteorological stations.
69. Develop two multi purpose water conservation structures along Nzoia and Nyando rivers.
70. Develop 24 medium sized multi-purpose dams.
71. Rehabilitate and augment Mzima pipeline.
72. Implement Tana Delta initiatives.
73. Expedite rehabilitation of the Bura irrigation scheme.
74. Implement sewage initiative.
75. Water catchment management.
76. Secure wildlife corridors and migratory routes.
77. Relocating of Dandora dumping site.
78. Land cover and land use mapping.

INFRASTRUCTURE SECTOR

79. Dredging and deepening of Mombasa port.
80. Rehabilitation and expansion of Kisumu Airport.
81. Nairobi Metropolitan region bus transit system.
82. Development of light rail for Nairobi and suburbs.
83. Development of new transport corridors.
84. Weather modification programme and Meteorological systems modernisation programme.
85. Construction industry development policy.
86. Public utility management system.
87. Rural electrification programmes.
88. Solar Electricity Generators to 74 public institutions.
89. Energy access scale-up programme.
90. Booster pump station for Nairobi – Mombasa pipeline.
91. Parallel pipeline from Nairobi to Eldoret.
92. Extension of 352km oil pipeline from Eldoret to Kampala.
93. Construction of LPG handling facility in Mombasa and Nairobi.
94. Appraisal drilling project to ascertain quality and viability of coal deposit in Mui Basin of Kitui and Mwingi.
95. Appraisal drilling at Olkaria and Wind power generation.
96. Co-generation of power in processing of sugar.
97. Implementation of 330KV transmission line project between Arusha and Nairobi.

50% growth in 5yrs??? C'mon I'm sure even yourself you don't want to believe that Uhuru can take all credit for that. Any president could order review of the economy and rebase it so that things can look bigger than they before. But it don't make any difference to a common man in the street.

Let me ask you something, with a long list things you've just mention, where is EAC? Or in another words, were is EAC on vision 2030?? Kenya is looking after Kenya which is fair enough. But we keep hearing countless of time that Tanzania has been a stumbling block when it comes to EAC issues. We try out best to keep thing tight so that when it come to join a single currency things would not be out of place. But with this Kenyan debt, we'll end up with a challenge on our hands. I'm not sure if you remember the issue of foreign reserved. All other countries in EAC wanted to have 6mouth worth of import, and Kenya refused because they said that was too much and they could not afford, in the end all they all agreed with Kenya and kept it to 4 month. That's how community works, if it was Tanzania demanding that, wow maybe another CoW could've been formed in the next room.

 

[Kobello]

Read my response to lenpel above.

What you fail to understand is, Tanzania's SGR project covers over 2500 km of railway and it's cut into like 10 pieces vs. the two pieces in Kenya.

To get the best deal, you need different contractors and consultants building different pieces. It takes time and a lot of lobbying. A South African contractor just won the tender for Dar - Morogoro and 15% of it has been paid already. Apart from the government, contractors local Banks and other partners are needed. It happened that Zuma can be lobbied for financing based on his country's company winning the tender (as Erdogan's) and his country being a member of BRICS. There's nothing wrong with that as long as we shop for a better deal.

Tanzania could've easily get funding from China (it already had) and still can if it offers Chinese Companies parts of the project. Chinese companies are still betting on other parts. But that's not what Tanzania is looking for, we are looking for a better deal. There's no struggle for financing, there's struggle for a better deal.

Kenyan SGR was slated to reach Kigali in 2018. Where is it now? There's a political part of the equation that you fail to understand (hey!, you are Kenyan!).

 

[Mwanzi1]

I can only speculate that Tanzania didnt wish to be rated due to the fact that it is not creditable in the first place.
Tanzania has benefitted a lot from the credits by these "hyenas" to cushion its desperate financial needs, and at one point they agreed to erase some of your debts you owe them.
Otherwise, your debt levels today could have been reading at 70% or 80% or +++%!

Tanzania was once a country very saddled with debts, which it was expected not to be able to repay due to the high levels of poverty and economic difficulties.

On the regional currency, Kenya is not on a borrowing spree in order to wilfully hamper the EAC's dream of having a single currency, an idea which I think would not be achieved at the near future given the prevailing circumstances.

Haha your funny, ati "not rated due to the fact is not creditable". With over 57 tcf LPG and counting m laying on the ground. Gold reserve you can't find any where in the region, with iron ore which we can mine for over 100yrs, uranium, nickel, human capital, bordering with 8 counties or markets, the big fat ocean not to mention tourism and your saying not creditable?? Haha your funny really funny.

We didn't go to those hyenas creators and ask for the forgiveness, UN under MDG did that. And is not only Tanzania who were let off, so many other countries did it too. But now we're watching our PnQ, we don't rush to things we are not sure about including "slave loans" from China.

 

[Iconoclastes]

Kenyan SGR was slated to reach Kigali in 2018. Where is it now? There's a political part of the equation that you fail to understand (hey!, you are Kenyan!).

Uganda.

But let us wait and see how this whole thing puns out.