I thought issuing of a dollar denominated domestic bond was a joke when it was first muted in late 2022. Looks like it has now made it to the MTDMS as a source of GoK funding.

1. Why would anyone want to further dollarise the economy? .........Encouraging people to save in dollars because you are paying up isn't a good idea. You'll have to keep generating dollars to pay the interest & it comes at the expense of boosting domestic assets /savings.

CMA's recommendations on the pending bills - More questions than answers!

1.CMA says a portion of tax rev will be ring-fenced to back the bond. Where’s the tax rev to ring-fence? If there’s a rev stream available, why not issue a normal T Bond & service the debt with rev stream? 2. Will it target the same pool of buyers of local bonds ? Will this not scare the markets more? Tax revenues go to consolidated funds and the first charge is debt. So there is no extra comfort provided by the securitization?

1/5 Folks - There are PROJECTS and there are OUTCOMES. Both sides of the Jubilee coin taking credit for PROJECTS (although one side is disowning the liability side) but what are the OUTCOMES of these tumejenga hii, tumejenga hiyo? 2/5 PROJECT - We built a railway
OUTCOME - cost of transporting goods inland is higher

PROJECT- We built stadia
OUTCOME - Fifa bans the 2 top stadia from hosting matches

PROJECT - We have over supplied power
OUTCOME - The cost of power too high & power company on death bed

1. We've been telling you that the consequences of running a budget deficit of 9% on avge over 10 yrs would catch up with you eventually. Kwani where did you think the money to pay for these deficits would come from? Even those who were singing "webe ni ure ure" are now crying! 2. You have invested billions in Galana Kulalu but where is the food? Your current & former energy ministry officials have side IPP hustle businesses that are making your electricity bills unbearable. Your new SGR was supposed to bring cost of doing business down but......

1. You build a railway costing Ksh 500b.
2. You borrow the money from a Chinese bank.
3. You give the contract to a Chinese company.
4. The Chinese Bank pays the company in China.
5. The Chinese Co. brings everything needed to build the railway from China. Including labour 6. When it is time to pay the debt, you collect taxes from Wanjiku in Nyathuna (who never sold cement, steel or even food to the Chinese) and pay the Chinese.
7. The Chinese money stayed in China. The tax money also goes to China. China has the 500b it gave you plus more!

More taxes will not solve our debt and deficit crises. In fact, it will make it worse, because no matter how robustly our tax revenue grows and no matter how much they tax poor Wanjiku, this administration will always find a way to spend everything it collects -- plus more This administration is operating on the assumption that there is no way to fix our chronic budget problems without more money. Its main message during every budget day has been that the tax revenues simply are not enough to cover the cost of government. .

Let's do the maths.

A county project is awarded for 100m.

VAT is 16%

Money going into the actual project is 84m? Wait!

The winner of contract most likely pays 10% of the original 100m to be awarded the contract. That is 10m

project money reduces to 74m. Because of pending bill problems & also greed, the winner of the contract plans for at least 20% mark up - of the original amount. That is 20m target.

74m less 20m is 54m.

Work that was supposed to be done for 100m is now going to be done using 54m?

Oh wait!

Good to see Saudi Arabia at number 3 re remittances to Kenya (after US and UK). Remittances are now number 1 foreign exchange earner for the country. Whereas the US & UK markets have matured, the Saudi & GCC mkts have more capacity for further growth

businessdailyafrica.com/bd/economy/tan… The market is also not about just domestic workers. We have Kenyan doctors, university lecturers, consultants, bankers, engineers, nurses, hotel managers etc. Kenyan professionals are highly regarded in the region. These lot also are in influential positions to recruit more!

1. You are supposed to run smaller deficits in times of growth & run big ones to support the econ during recessionary periods. Jubilee doing the opposite. Taxes might not yield much more revenue but could actually see acceleration of businesses closing down - counterproductive 2. Whereas the govt needs money, from macroeconomic perspective, it doesn't make sense to hike taxes when the economy is flirting with recession. You just might tip it over. We are still in the middle of the pandemic and most governments have extended the Covid support measures

1. Some of the BBI amendments cannot even be practically implemented. Let's look at the amendment to article 203 that caps the revenue the county with the highest per capita allocation will get, to 3 times the lowest. 2. Let's use the current allocations of Ksh 316 transferred to counties in 19/21 FY. Tana River & Lamu get the highest per capita allocation of Ksh 18,533 & 18,033 respectively. Nairobi county gets the lowest at Ksh 3,621. Meaning no county should get more than Ksh 10,863.

1. Dear H.E President Uhuru Muigai Kenyatta @StateHouseKenya. In 2022 (in sha Allah), there will be an election & there will be losers & winners, court petitions, riots, teargas not withstanding the fact that BBI will be in place. It is happening even in the USA these days. 2. BB1 will not change that. What BBI will definitely do is to add to our already heavy economic burden. We are already in a difficult situation & it is time to downsize & consolidate. Not a time to create PM office,2 deputies (remember these are not individuals but institutions)

1/ 5. The promise to give counties 600B (35%) is just a pie in the sky promise that will break the country or cause a constitutional crisis in the future. As we speak, we can't afford to pay for both O&M & counties and something may have to give way very soon. 2/5. We can only afford to pay for salaries + dent & O&M or counties. That is why counties have not been paid for the last 3 months & s@$t is about to hit the fan. Those saying this will be possible because more functions will be devolved to the counties are also being dishonest

1. In almost every economy, the government is one of the biggest customers of the private sector for supply of goods & services. The private sector reinvests the money & this helps grow the private sector & the economy & also create sustainable employment for the citizens. 2. Since 2013, trillions of shs in development budget & recurrent expenditure has gone into briefcase cos - to well connected folks with no real businesses & who don't employ even their spousese. Their inflated profits are used to buy Mercs, real estate & expensive overseas hols

Covid-19

Along with dealing the health issues, the highest urgency lies in securing the funding to businesses. The government, the central bank & the commercial banks should come together and play a key role in mitigating the long term economic damage of this health crisis! 1. Covid-19 is a health crisis that has also serious economic consequences. Many countries are dealing with the health problems but are at the same time trying to minimize the impact on the economy now & once the health issues are dealt with.

1. We face serious economic issues in 2020. It is no rocket science. All the numbers point to an unfolding debt nightmare. We need more strategic approach to macro-economic policy instead of piecemeal knee-jerk tactical interventions if we are to save the country. 2. Unless we put breaks to spening & turn the economy around quickly, there will be a downward spiral feeding on itself — an internal fiscal & financial sector crisis. Slower growth would also deepen an already worsening fiscal crisis.

1. GoK has instructed parastatals to transfer ownership of all the t-bonds they hold to GoK. Debtor asking Creditor to transfer all debt to it. This effectively = forced debt cancellation. 2. Some would ask - what is the problem? government borrowed from itself in the first place & that is now being reversed. Well, it is complicated.

I see some folks saying the demonetisation of the 1000 bob has failed coz a big % of the notes have failed to return. Exactly the opposite! The main objective of the demonitisation was to force people with black money to suffer losses. The more money extinguished the better! If all the notes were returned i.e 100 percent of the 217 billion in 1000 notes was exchanged for the new notes, it means everything has been accounted for and there was no black money out there. In other words, the black money, instead of getting extinguished, got whitened.

Projected numbers are always rosy. Ignore them. Look at the ACTUALS. Treasury, in every budget, will tell Kenyans that the budget deficit is 5-6% & projected numbers will even go down further. But look at the ACTUALS. Almost hitting double digits. Disastrous! #BudgetKe2019 The deficit numbers are even worse than they look coz they do not include the PENDING BILLS. GoK budgets for a road, completes 25% of the road & the 75 % to complete that road is not budgeted for in the next FY. Why so many projects are incomplete. #BudgetKe2019

Jubilee Admin policies have been forced down the throat of Kenyans like my mum used to force that smelly cod liver oil down my throat. It didn't work because I used to vomit it out immediately. Buy an SGR. Realise that no one needs it. Force importers to use it. Importers now paying more than they were paying to transport goods. How will higher costs help the economy?

Seeing a lot of debate re IMF & whether under Kibaki IMF was also in town. Yes, under Kibaki, we had an IMF program. But the program had negligible budget support link & its terms were negotiated by a seasoned team at the Treasury led by Joseph Kinyua (captain, leader, legend) Kibaki also loathed the idea of budget financing through World Bank & Donors. The error made by the current admin & for the current program was to link Eurobond issuance with IMF standby facility. That was a big mistake.