UNCTAD argues that Kenya needs to find other ways of sourcing revenue, apart from depending on external funding.
Borrowing can be an important part of improving the lives of Africans,” UNCTAD Secretary-General Mukhisa Kituyi said.
Another cause is that Kenya is a commodity-dependent country. External debt sustainability is subject to the boom and bust cycles on international commodity markets. Therefore, the current collapse in commodity prices means a fall in revenues and lack of money to service the debts.
-Country’s external debt ratios appear unmanageable and if nothing is done about it, the debt growth may end up precipitating a crisis as experienced in the late 1980s and 90s.
Story:
Kenya is among African countries facing an uphill task in repaying their external debt, a study reveals. The new report titled ‘Economic Development in Africa Report 2016’ by the United Nations Conference on Trade and Development (UNCTAD) argues that Kenya needs to find other ways of sourcing revenue, apart from depending on external funding. Some of the avenues which are being proposed in order to manage its external debt include: encouraging diaspora remittances and encouraging private-public-partnerships (PPPs) in development. “The external debt continually looks unsustainable. Apart from encouraging remittances and powering PPPs, Kenya also needs to clamp down on illicit financial flows that go outside the country,” the report says. The gist of the argument in the report is that the country’s external debt ratios appear unmanageable and if nothing is done about it, the debt growth may end up precipitating a crisis as experienced in the late 1980s and 90s. “Borrowing can be an important part of improving the lives of Africans,” UNCTAD Secretary-General Mukhisa Kituyi said while addressing issues raised in the report. “But we must find a balance between the present and the future, because debt is dangerous when unsustainable,” he added. A core reason the country is finding it difficult to manage its debt is the decision to re-base the economy by the World Bank, such that Kenya has now achieved middle-income status. Having middle-income status means concessional financing from multilateral development partners will be phased out in the future as these development partners divert more budgetary resources towards other poorer and more vulnerable countries. Another cause is that Kenya is a commodity-dependent country. External debt sustainability is subject to the boom and bust cycles on international commodity markets. Therefore, the current collapse in commodity prices means a fall in revenues and lack of money to service the debts. The new revelation comes after the Controller of Budget in February this year disclosed the country was finding it harder to attract grants from development partners because of the high conditions set by these partners. Kenya’s budget deficit is forecast to climb to 9.3 per cent of gross domestic product in the 2106/17 fiscal year starting on July 1, compared to below eight per cent in the current 2015/2016 financial year, a rise which has unnerved investors. As it sought to raise funds domestically in October and November last year, yields on 91-, 182- and 364-day Treasury bills climbed above 20 per cent, straining State coffers and hitting commercial bank borrowers and companies.
No amount of evidence can sway a diseased mind. Kama umeambukizwa ukabila the only thing you’ll see is enemies when you tribe is in power.
Auditor general Ouko - a government official - comes out with shocking figures on hundreds of millions sometimes billions of money lost and a large section of Kenyans and Kenyatalkers decide to call him a liar because of his last name.
Lately it seems China is making decisions on how much we should borrow and deciding what projects we should undertake.
We have borrowed 600b from China in the last 90days yet our debt last year to China was 264b.
We will be paying 250b on interest debt this year which is 64b more than the teachers pay and 221b more than our health budget.
Invest in development has gone down about 9% (721b to 626b)which is slowing the circulation of money.
Much of the loans are going back to China as the infrastructural investments are tendered to the Chinese.
There is a motion in parliament to cap the interest at 4% above CBK, a move thats being fought by CBK and KBA sponsored by MP Jude Njomo.
The rise in the cost of petrol and related products has lead to an increase in inflation, increased cost of basic commodities and subsequently an overall price trigger citing higher costs of production.
It is if the money is used to finance building new infrastructure, at some point we would have had to borrow since we cannot to pay for things like SGR with our own money ama a new port in lamu.
Shida ni the wanton wastage and thievery happening in government, both national and county units. The President and everyone else are giving us lip service, Kenyans need to ditch this brinkmanship, we must demand a serious long-term crackdown on wastage and corruption, Jubilee or CORD we are in this together.
difference is that kenya’s economy is more diversified and the govt. does not pursue socialist policies that require massive subsidies that they got from the oil money. Venezuela’s revenue is 95% oil related. For Kenya, the Turkana oil will be nothing but a bonus regardless of the prevailing global prices.
Assuming that we see some of that income. Remember that Ghana also started mining oil some time back. But they are not exactly thriving . I see the same things happening here that happened in Ghana starting the mid 2000s. Chinese invasion , over borrowing by claiming improving infrastructure , reforms , oil mining have all led to little or worse for the poor.
angalia hivi milk farmers wako screwed ju price sahii inacontroliwa na cartel ya uhunye, kenya wako reliant on three major cash crops tea coffee na flowers real estatefuture si that bright na assuming trump a come into power na aweke hizo dumb foreign policiesdollar itago down in flames na at some point china itadai mbesha yake plus interest its only a mater of time,of you are smart fungua secure account somewhere in europe
Milk is being bought at 35 Bob per litre, in some areas vendors are having a hard time sourcing their milk. I come from a milk producing zone and I own three cows, hiyo theory yako ya being screwed sijui umetoa wapi.
The relationship between China and the U.S. is too symbiotic for one to completely screw the other up. Both entities have an interest in the long-term existence and prosperity of the other. China in essence lends money to the U.S to enable it buy its products and thus fuel its economic expansion.
hii ndio shida ya kufanya biashara bila forethought last year milk ilikuwa 40 per sa hii ni 35 na hizo ngombe tatu si im guessing unarun ka dairy si large scale business sa hauezi elewa hiyo margin ni how big in terms of millions
Kama hujui mambo ya demand and supply huwezi saidika, we have a cooperative that buys milk at 35 shillings no matter what all year round. Vendors buy it at 25 during the rainy season and at 30 during the dry season. Who’s shafting who? You are in large scale, how many cows do you have?
The more money we owe, the tighter the chains of financial slavery become. Now on top of the West making us their bitch China has become our second master. While this is happening our leaders in govt and opposition are doing nothing to free the future leaders from these masters.