IMF and You

IMF just started
I am not well-versed in matters of economics but I am ever willing to learn and unlearn (Socrates-The only thing I know, is that I know not).
From Business Daily Africa, the IMF has forced Kenya to accept a clause that 1. Makes IMF involved in CBK setting and reviewing of inflation rate target 2. IMF reserves the right to suspend loans provision to Kenya should Kenya 3. Not stay within its CBK inflation rate target give or take by 2.5%, that’s it must be around 2.5% on the minimum and maximum of 7.5%

  • In layman’s terms, inflation rate is rate of price increase compared to a certain year. For instance if 2015 you purchased a kilo of tomatoes at Ksh 100 but we have 5% yearly inflation, you would need 105 to purchase the same kilo of tomatoes in 2016, you would need 110 in 2017, and Ksh 120 in 2019.
    As mwananchi the demands by IMF (it seems they have lots of demands) on inflation seem good. They appear to favor price stability and reprieve from the government. But there’s a catch.
    (Remember I am a layman on economic matters but we can try to understand it ).
    The catch is that (in my thinking)
  1. We are not going to have any more wage increases. Do not hope for salary increases especially civil servants including those in parastatals. This includes teachers, nurses, police etc.
  2. The government will run into a dilemma or a cul-de-sac (no way out). Energy expenses- LPG gas, petrol, and electricity directly affect our inflation rate. Increasing taxes on them will increase inflation which is now at 5.19 to almost or beyond the limit demanded by IMF. What are other options to raise tax revenue from a partially failing economy? (Remember that a failing economy does not mean that everything stops, actually some sectors and people thrive well in a struggling economy)
  3. The government will soon delay or fail to pay civil servants triggering distress in the financial market. A lot of people are servicing loans. A sharp growth in non-performing loans may destabilize some banks on the extreme.
  4. Any hint that IMF is abandoning us might trigger runaway depreciation of the shilling triggering financial market collapse
  5. We might go the Lebanon, Greece and Argentina way. Our case is closer to the Lebanon one.
    ¶NB: Your more informed clarifications are welcome. I am a rookie on matters of economy but a sharp student

We are heading the Lebanon way. Blocking the anus cannot cure diarrhoea. Mlipenda mabarabara za kitajiri za ghorofa, ilhali nyinyi ni masikini. Badala mjitengezee barabara mnataka experts kutoka ulaya wawatengenezee. Badala ya manufacturing plants pesa zenu mliweka kwa flats, chuma na kokoto na cement, inameni mchukuwe sabuni.

They’ll be forced to sell assets, Privatize SOEs, redundancies and prevented from stimulating the economy via monetary policy.

Of course you have corporate dems in the white house. All the above will be “forgiven” if and only if, the corporate dems get their man so that the real milking can begin.
These sickening requirements are not limited to vumbistan, but also the Caribbean.
Ngoja utaona vuruga zitakazo zuka huku bara la Africa wakati huu wa Biden.
Chukua pop corn

IMF did not force Kenya to accept anything. Kenya chose so they could get cheap loans.
Life definitely is long to get more expensive. Everywhere in the world.