ONLY THE STREETS CAN SAVE KENYA
The meeting between Ruto & Gideon Moi was unexpected but not surprising. Politicians are always pursuing their interests, whether business or political. Anyone who thinks any politician is pursuing his or her interest needs their head examined.🧵
The reason why beating an incumbent is hard is because of the power, resources and influence they wield. These can be used to manipulate even their fiercest opponents.
During the 90s, opposition politicians shifting goalposts was a normal thing. Stories used to be told of how people visited the State House, and the president would personally serve them tea.
The "humble" gesture was so disarming that such naive visitors would have a different image of the president at their first sip of the tea.
To crown it all, they would receive a briefcase full of cash as they were being seen off. This would be accompanied by the words "hii ni ya mama ya kununua mboga."
Another disarming tactic which made the gift hard to decline. Once received, the hardline opposition politicians would be compromised beyond redemption. They would start singing the president's praises like a parrot.
People are even more vulnerable in a poorly performing economy. Most of the politicians are wallowing in debt. When the economy sinks, politicians become cheap. The vast State resources are easily deployed to neutralise such politicians.
All this demonstrates the power of incumbency. It is almost an unlimited ability to grant favours and make promises. Only the most principled can resist such.
Yet this power isn't without limits. For a regime whose rule is highly objectionable due to countless failures and lies, incumbency isn't enough to save it.
Politicians continue with business as usual politics in a most unusual political and economic environment.
This may create a situation where change through the ballot becomes impossible. This is what is causing numerous regime changes through the streets all over the world.
Every time I think of how Kenyan politicians are behaving, I see this possibility becoming a reality in this country. Mannerless and selfish politics make democratic change impossible and a street revolution inevitable. This can happen before or after the election.
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Kenya’s Economy: 80% Informal, 100% Confusing. Where’s All This Money REALLY Coming From?
Many people struggle to understand the Kenyan economy because of confounding factors. These are factors that create analytical fog, leaving many questions unanswered. THREAD 🧵
People wonder why the economy remains functional despite years of mismanagement. The country looks like one big construction site despite years of difficulties and uncertainties. Where is all this money coming from, people ask.
The main confounding factors include a huge informal economy, illicit financial flows, government borrowing and external economy whose impact isn't fully captured or properly understood. Yet they all inject cash into the economy.
Kenya's economy is over 80% informal.
The current political agitation in the country has its roots in the economy. The Kenyan economy is collapsing systematically after years of looting and mismanagement. If you think you have seen a lot, you ain't seen nothing yet.
THREAD 🧵
Those who say that the youths have no issues and are driven by petty politics are living in denial. Every year, we are releasing a million youths into a job market that is only creating 80,000 new formal jobs. In 2024, the informal economy created 90% of all new jobs.
The saying that the bulging number of jobless and hopeless youths is a ticking time bomb is no longer a dull-sounding cliché. The bomb is ticking, and time is not on our side.
If you think a lot about the proposals in this year's budget, you will lose your mind. The media focuses a lot on the Finance Bill. Yet the Bill is a derivative of the spending plan and that is where the real story is.
THREAD 🧵
The national government's recurrent spending is set at KSh 1.7 trillion. When you add the KSh 1.1 trillion for debt interest, you get KSh 2.8 trillion. Adding pensions and other CFS takes you to KSh 3 trillion.
Assuming county governments spend KSh 300 billion on recurrent items, you get a total of KSh 3.3 trillion.
That means we need at least KSh 3.3 trillion for recurrent spending, yet we are collecting KSh 2.3 trillion in tax revenues.
The government has borrowed a new USD 1.5 billion Eurobond at an interest rate of 9.5%. USD 900 million from this new loan will be used to pay off a Eurobond issued in 2019. According to this press release issued in 2019, that Eurobond attracted an interest rate of 7%. 🧵
This regime keeps telling us about inherited debt, but now they are issuing more expensive debt. They inherited cheap debt and are replacing it with more expensive debt. Look at the attached interest rates for previously issued Eurobond.
These actions are reckless and contradict the government's Medium Debt Management Strategy which prioritises concessional loans over commercial ones. Such expensive refinancing will only worsen the debt servicing crisis.
When @WilliamsRuto took over power in September 2022, the total public debt stood at KSh 8.7 trillion. Today, it stands at KSh 11.1 trillion. In less than 30 months, he has borrowed a staggering KSh 2.4 trillion. 🧵
This is the fastest accumulation of public debt by any president in Kenya's history. In a similar period, Kibaki accumulated KSh 117 billion while Uhuru accumulated KSh 1.1 trillion.
In the financial year ended June 2022, public debt interest amounted to KSh 578 billion. In the financial year ending June 2024, we spent KSh 841 billion on public debt interest. This financial year, we will spend over KSh 900 billion on public debt distress.
From the time I started writing on the issue of reckless borrowing & its implications on the economy, there have been people accusing me of crying wolf, fearmongering, negativism & even alarmism. At one time we were called River Road economists & "sky is falling" brigade.🧵
Even today we still have naysayers who are asking when the much-hyped economic collapse will come. These are people blinded by political sycophancy and tribalism to see the obvious. They even downplay their own economic pain.
They have a simplistic mindset that an economic collapse is an event. The truth is that economic collapse is a process which can be decades in the making.