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Housing Fund Shenanigans
hardwood
#21 Posted : Tuesday, February 05, 2019 7:01:37 PM
Rank: Elder


Joined: 7/28/2015
Posts: 9,162
Location: Tuthu, Metumi
Angelica _ann wrote:
hardwood wrote:
Ex-Uhuru adviser says debt may affect growth in Kenya

https://www.businessdail...510-11dhwv7z/index.html

Quote:
Former senior executive adviser in the Office of President Uhuru Kenyatta now says Kenya overcommitted itself to debt and may struggle to curb borrowing spree in the wake of sluggish growth in tax revenues.

“If you look at 2011/2012, we were spending only about 11 per cent of GDP (Gross Domestic Product) directly to repay debt. We are now talking about 57 per cent of GDP in public debt.”

“If we reach a debt-GDP ratio of 74 per cent, basically a lot of our securities and bonds will be declared junk. That is a big threat,” said Dr Wagacha, who at one point chaired the Central Bank board.

Kenya’s total debt stands at Sh5.14 trillion, according to data from Central Bank of Kenya (CBK), with the Treasury projecting it to hit Sh7.17 trillion at the end of June 2022, the year Mr Kenyatta leaves office.

If that comes to pass, President Kenyatta will have contracted at least Sh5.27 trillion debt to implement his manifesto in 10 years in power, having inherited slightly more than Sh1.89 trillion in June 2013.


Scaremongers, look at Japan etc we are far from it smile


You should listen to the experts, not politicians. Though I know you were being sarcastic.smile
limanika
#22 Posted : Tuesday, February 05, 2019 8:55:16 PM
Rank: Veteran


Joined: 9/21/2011
Posts: 1,955
wukan wrote:
limanika wrote:

Best solution is to create jobs, have people earn higher wages on average and then they can afford houses they want at market rates. But because jubilee failed to grow the economy, they want to climb tree from the top. By the way, it's one year later since the promise and by now we're supposed to have 100,000 houses of the 500k done and dusted. How many are complete?


Jobs are not created in a vacuum. There is an ecosystem that generates jobs and that ecosystem needs to be built in the right way by having a compact urban form that is served by a functioning transport system. As the ecosystem becomes more complex then it generates higher wages jobs.

An example is Shenzhen turning peasant farmers into techies in 3 decades. See more in the youtube link(1hr long but worth your bundles)
https://www.youtube.com/watch?v=SGJ5cZnoodY

Even where jobs are available affording houses at market rates is quite hard. Ask @hardwood or @mugundaman how it feels doing 3 shifts to raise 2,000$ rent. In the US they had to come with freddie mac and fannie mae corporations to get affordable housing/mortgages and in Europe they have social housing.

Jubilee maybe a messed administration but there are a lot of good ideas gathering dust in shelves and affordable housing is one of them. It was proposed way back in 2005 during kibaki's term. Once they get the mechanics right then the roll out will be ok. I know they plan to turn Eastlands from housing a mere 20K to more than 350K(that's a whole city). That will take time but it's a step in the right direction.



I agree that govt needs to provide infrastructure - Roads, Power, Water..to open up some areas - the Nairobi-Thika-Machakos Triangle case in point. Our agreement ends there coz that's the furthest govt should go. Private investors will then put up houses.

By the way, a govt that's so heavily indebted, it has to roll over debts, is the same govt saying let's build 500k houses for our people (who never asked for the houses in the first place) and if they're not taken we buy them back????
limanika
#23 Posted : Tuesday, February 05, 2019 9:00:29 PM
Rank: Veteran


Joined: 9/21/2011
Posts: 1,955
Angelica _ann wrote:
hardwood wrote:
Ex-Uhuru adviser says debt may affect growth in Kenya

https://www.businessdail...510-11dhwv7z/index.html

Quote:
Former senior executive adviser in the Office of President Uhuru Kenyatta now says Kenya overcommitted itself to debt and may struggle to curb borrowing spree in the wake of sluggish growth in tax revenues.

“If you look at 2011/2012, we were spending only about 11 per cent of GDP (Gross Domestic Product) directly to repay debt. We are now talking about 57 per cent of GDP in public debt.”

“If we reach a debt-GDP ratio of 74 per cent, basically a lot of our securities and bonds will be declared junk. That is a big threat,” said Dr Wagacha, who at one point chaired the Central Bank board.

Kenya’s total debt stands at Sh5.14 trillion, according to data from Central Bank of Kenya (CBK), with the Treasury projecting it to hit Sh7.17 trillion at the end of June 2022, the year Mr Kenyatta leaves office.

If that comes to pass, President Kenyatta will have contracted at least Sh5.27 trillion debt to implement his manifesto in 10 years in power, having inherited slightly more than Sh1.89 trillion in June 2013.


Scaremongers, look at Japan etc we are far from it smile

Laughing out loudly Ever asked yourself how come Japan is one of our largest donors 'their debts' not withstanding. Conventional wisdom is they stop giving us loan and pay their debt first, yes, no? Also ever heard of japan borrowing from whatever external donor and importing everything (material/labour) from the whatever donor

Tafakari hayo first then we can discuss after that
Ericsson
#24 Posted : Tuesday, February 05, 2019 11:45:02 PM
Rank: Elder


Joined: 12/4/2009
Posts: 7,042
Location: NAIROBI
Japan is the largest manufacturer and exporter of vehicles
Japan is the largest creditor of the world
Japanese per capita income is in the top 5 in the world.
The japanese currency the yen is an internationally recognised and one of the highest traded in the world.
The japanese currency also forms the basket of IMFs SDR currency (Special Drawing Rights)
Debate between kenya and japan no comparison
limanika
#25 Posted : Wednesday, February 06, 2019 7:31:27 AM
Rank: Veteran


Joined: 9/21/2011
Posts: 1,955
So much so for the comparison between Kenya and Japan....

Assume you have 2 hustlers, A&B. A’s biz has high value assets, their workforce is very lean, there’s no mismanagement of funds and large portion of after tax profit made is always re-invested in the business.

B, on the other hand, has bloated workforce, the wife is very extravagant and lives beyond her means. The biz has not been making profit in recent past and relies on overdrafts to meet their day to day expenses

Hustler ‘A’ decides to borrow an amount equivalent to 100% of his annual turnover. The amount will be used to install new production line and by his calculations, based on past performance and projected proceeds from the new investments he will be able to repay the loan within a given timeframe.

Meanwhile, Hustler B is still struggling. They need to borrow some money to remain afloat. The wife tells him that hustler A borrowed an amount equivalent to 100% of their annual turn-over. She tells B that if A borrowed an amount equivalent to 100% of their turn-over, then they are much better off than 'A' if they borrow just 50% of their annual turn-over. The money will be used to pay salaries for their bloated workforce and also enable the wife to fund her next trip to Thailand.

There goes your comparison between Kenya and Japan. Not perfect, but you get the drift.
rwitre
#26 Posted : Wednesday, February 06, 2019 9:28:32 AM
Rank: Member


Joined: 3/8/2018
Posts: 341
Location: Nairobi
limanika wrote:
So much so for the comparison between Kenya and Japan....

Assume you have 2 hustlers, A&B. A’s biz has high value assets, their workforce is very lean, there’s no mismanagement of funds and large portion of after tax profit made is always re-invested in the business.

B, on the other hand, has bloated workforce, the wife is very extravagant and lives beyond her means. The biz has not been making profit in recent past and relies on overdrafts to meet their day to day expenses

Hustler ‘A’ decides to borrow an amount equivalent to 100% of his annual turnover. The amount will be used to install new production line and by his calculations, based on past performance and projected proceeds from the new investments he will be able to repay the loan within a given timeframe.

Meanwhile, Hustler B is still struggling. They need to borrow some money to remain afloat. The wife tells him that hustler A borrowed an amount equivalent to 100% of their annual turn-over. She tells B that if A borrowed an amount equivalent to 100% of their turn-over, then they are much better off than 'A' if they borrow just 50% of their annual turn-over. The money will be used to pay salaries for their bloated workforce and also enable the wife to fund her next trip to Thailand.

There goes your comparison between Kenya and Japan. Not perfect, but you get the drift.


Applause Applause
limanika
#27 Posted : Monday, March 18, 2019 7:50:37 PM
Rank: Veteran


Joined: 9/21/2011
Posts: 1,955
Totally agree with Ndemo here. Govt has no business building houses no one asked for.

https://www.nation.co.ke...030026-8mvqhf/index.html
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