These are just my assumptions and random thoughts of the day.
For centuries Debt has been how empires grew and fell. This form of commodity is ingrained into humans as “I’ll pay for this later”
African countries have been completely distracted by the West and the East. Both these cardinal directions ultimate agenda is undermine the potential growth of this continent. Because they know if we work together we would completely change and alter the current sphere of geopolitics. Many African governments are struggling to raise budgets due to unforeseen commodities fluctuations which forced many to take lots of short term loans this was the first trap. Prices remain low and governments are forced to take more loans to cover deficits which is the second trap. Third trap is IMF/World Bank begin dictating trade policies and hastily signed EPA’s agreements are hashed out which make African countries feed Western countries almost for free and in return they dump there goods here killing the little amount of industries that are barely surviving. This is real life active scenarios happening across Africa.
In Kenya’s format our debt this year has climbed to almost $25 billion dollars. Which has attracted the sharks because of our constant complaining is the blood in the water. If you think about it $25 billion dollars to Western governments is nothing compared to the potential growth of the future if they controlled that debt. Africa’s is going to have the youngest and most agile population in the upcoming decades meaning that it will be a continent of unrivaled wealth from minerals, to it’s young exploitable population.
Anyway, let’s say if Kenya decided to sell its debt to the highest paycheck for $50 billion dollars that means we exchanged short term benefit to pay salaries, fix roads, equip hospitals etc. but long term we are the losers because we’d now owe $100 Billion dollars worth of debt. To a country, or individual or bank. Who would begin selling our assets to recover that debt, government services would then be slashed in half meaning and services no longer reach the people, next step would be to work the population into large scale factories and farms and work like a slave labor force. By the time that debt has been paid the damage done will be catastrophic and someone would have made a trillion dollars in profits and what would be left behind are broken governments and people destroyed and orphaned like in a war zone.
This is how the Western world operates we cannot sit lightly like moths staring in lamps expecting the people who destroy us will be the same ones to build us.
The sad part is that a huge chunk of those debts are hidden in Swiss bank accounts and offshore tax havens.
If for example KRA mboys would collect taxes dilligently,county govts collect land rates from every acre of land all over the country then there will be no need of donor aids.
But with black man giving birth like rats soon some countries will be repossesed by “creditors”…
You sold the debt for $25 billion. But whoever bought it did it for $50 billion. For him to recover his money back he’ll need to make at least $100billion dollars in return or more to make the venture worthwhile.
it doesn’t work like that,if value of debt goes up,the yield goes down,and this has no effect on the issuer of the debt,at the end of the day he still owes 25b only.
Depending on the debt agreements. Us being an African country comes with very high risk factors so that must be factored into such agreements.
If someone bought all out debt for $25billion half of that money will go into paying for salaries and finishing up the list of infrastructure backlogs. When it comes back to paying the amount including accumulated interest it would be even higher than the original terms of the debt agreements.
My scenario I was highlighting is what if we were desperate and a greedy entity bought all our debt with caveats they’d suck the nation dry.