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Today, the accepted wisdom is that the reason we are seeing a drop in the flow of credit to the private sector in Kenya is the impact of interest rates capping law in Kenya.
If you agree with this notion, how then do you explain the fact that Tanzania and Uganda, despite not having interest rate caps, are also experiencing a similar drop in the take- up of credit?
Clearly, this is but a simplistic explanation to a very complex problem. The elephant in the room is the sharp decline in liquidity-injecting financing brought about by the spike in these Chinese and Chinese-type loans, which do not stimulate positive multiplier effects in the macro economy.