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Kenya Economy Watch
Rank: Elder Joined: 12/4/2009 Posts: 10,639 Location: NAIROBI
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The World Bank in October said Kenya’s unemployment rate was around 11.4%, compared with the government’s 2015-16 estimate of 7.4%. Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Elder Joined: 12/4/2009 Posts: 10,639 Location: NAIROBI
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Annual Pension payouts: 2008/09: Sh25bn 2018/19: Sh86bn 2019/20: Sh109bn (F) 2020/21: Sh153bn (F) Civil servants do not contribute to their pension and their benefits are paid straight from taxes. Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Member Joined: 5/2/2018 Posts: 267
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tycho wrote:Leadership is important, demographics are important, but the most important thing is to understand that the basic unit of the economy is the human individual's physical and psychological structure. This is the base of all economics that we have been overlooking.
Call it 'humanism' in its most ancient meaning. If we can invest in humanism, then we can turn clay into Gold. You can imagine what would happen if we were to produce gold even at mashinani. In essence, you're speaking of the kind of spirit that the people of yore in the fabled Babylon had been inspired to have. Producing food in the desert and thriving. All good. I think it had something to do with leadership; to inspire the people. That's what's lacking in the country right now. And those in the position are squandering the 'little' there is. They can't inspire us. We need a fresh wave like the one that ushered the Kibaki era. Hope was all-around; well, at least for two years, before the Chungwa-Ndizi referendum in 2005.
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Rank: Veteran Joined: 11/13/2015 Posts: 1,569
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lochaz-index wrote:wukan wrote:tandich wrote:How does one immunise their investments, even if partially, from the impending gloom? The malaise can go on for a long time. Haiti has been at it for 200 years, Argentina has been on burst burst cycles for 50+ years. The last time GoK did a similar binge on infrastructure was around 1920-1927. The economy never recovered from the debt binge until the 2nd world war. It took the Swynnerton Plan to fundamentally restructure the economy to get things going again. In between Happy valley manenos happened which was the equivalent of current parte after parte. Bro Enjoy life, plan for retirement-investments wachia wajukuu Everything ultimately rises and falls on leadership. Britain was on the malaise in 1960's and 1970's till Margaret Thatcher came and took the hard bold decisions. If you look at the current kenyan leadership no one has the brains or balls to get us out of the quagmire. So for now let's continue with parte after parte I see you are on a mission to kill the perma-optimists here who keep hoping and praying - but mostly praying - for some kind of economic miracle to surmount the malaise. I partly disagree on the point of everything hinging on leadership and by extension politics. The social and economic variables always move way ahead of the political situation prevailing at any one point. Politics is a therefore a consequence not necessarily the determinant. For example, that is why despite the rapprochement nothing changed course including the NSE. Further afield in SA, even after booting Zuma the xenophobia continues and I suspect little to no reform will be acoomplished by Ramaphosa. In Zim, after the departure of Mugabe the monetary experiments and political represssion continue unabated since the social fabric(social psyche/integration) and economic variables haven't changed one bit. On the other end of the spectrum Botswana and Ghana(save for their debt appetite) are chugging along just fine despite the political changeovers. Politics/leadership is just a case of the tail pretending to wag the dog. The key for KE as is for many African countries is demographics. That is whether they will be able to harness the demographic dividend of a young population or will it turn into a never ending spiral of social upheaval. Actually my mission is to show that at the stage we are in the malaise is curable with minimum pain. The social psyche is not too injured. If not then things can get far much worse and for a very long time. All it takes is leadership and brain trust to administer the shock therapy and get things rolling again. If we get the timid half measures like what the Haiti mulatto elite did in Haiti allowing Papa Doc to outsmart them and build a personality cult and the rest is history. In Haiti it was the same dynasty versus hustler nonsense debates that we are having in KE. The problem of ZIM and SA is the same timid half-measures instead of shock therapy. Argentina's Macri also realized gradual reforms don't work. Whether KE demographic dividend is harnessed is largely a leadership issue. That's why I said in another thread that watching the next 32 months will be interesting. It's important to watch the direction younger voters will take before committing an investment decision.
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Rank: Elder Joined: 7/1/2011 Posts: 8,804 Location: Nairobi
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Superprime1 wrote:tycho wrote:Leadership is important, demographics are important, but the most important thing is to understand that the basic unit of the economy is the human individual's physical and psychological structure. This is the base of all economics that we have been overlooking.
Call it 'humanism' in its most ancient meaning. If we can invest in humanism, then we can turn clay into Gold. You can imagine what would happen if we were to produce gold even at mashinani. In essence, you're speaking of the kind of spirit that the people of yore in the fabled Babylon had been inspired to have. Producing food in the desert and thriving. All good. I think it had something to do with leadership; to inspire the people. That's what's lacking in the country right now. And those in the position are squandering the 'little' there is. They can't inspire us. We need a fresh wave like the one that ushered the Kibaki era. Hope was all-around; well, at least for two years, before the Chungwa-Ndizi referendum in 2005. I am also talking about science and how it is defined and used. I am talking about cultural support more like that of the Renaissance era. This is about deep changes in personal worldview without the intervention of the government. Notice the immorality of leaving leadership to government. The government serves the people, not vice versa. Government is established through personal action. The economy is built through personal action. I am talking about reappropriation of history and even probably the extinction of democracy as a form of government especially the kind that robs the citizen ethical foundations. Like our present system. I am probably NOT talking about things we are used to.
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Rank: Veteran Joined: 9/18/2014 Posts: 1,127
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wukan wrote:lochaz-index wrote:wukan wrote:tandich wrote:How does one immunise their investments, even if partially, from the impending gloom? The malaise can go on for a long time. Haiti has been at it for 200 years, Argentina has been on burst burst cycles for 50+ years. The last time GoK did a similar binge on infrastructure was around 1920-1927. The economy never recovered from the debt binge until the 2nd world war. It took the Swynnerton Plan to fundamentally restructure the economy to get things going again. In between Happy valley manenos happened which was the equivalent of current parte after parte. Bro Enjoy life, plan for retirement-investments wachia wajukuu Everything ultimately rises and falls on leadership. Britain was on the malaise in 1960's and 1970's till Margaret Thatcher came and took the hard bold decisions. If you look at the current kenyan leadership no one has the brains or balls to get us out of the quagmire. So for now let's continue with parte after parte I see you are on a mission to kill the perma-optimists here who keep hoping and praying - but mostly praying - for some kind of economic miracle to surmount the malaise. I partly disagree on the point of everything hinging on leadership and by extension politics. The social and economic variables always move way ahead of the political situation prevailing at any one point. Politics is a therefore a consequence not necessarily the determinant. For example, that is why despite the rapprochement nothing changed course including the NSE. Further afield in SA, even after booting Zuma the xenophobia continues and I suspect little to no reform will be acoomplished by Ramaphosa. In Zim, after the departure of Mugabe the monetary experiments and political represssion continue unabated since the social fabric(social psyche/integration) and economic variables haven't changed one bit. On the other end of the spectrum Botswana and Ghana(save for their debt appetite) are chugging along just fine despite the political changeovers. Politics/leadership is just a case of the tail pretending to wag the dog. The key for KE as is for many African countries is demographics. That is whether they will be able to harness the demographic dividend of a young population or will it turn into a never ending spiral of social upheaval. Actually my mission is to show that at the stage we are in the malaise is curable with minimum pain. The social psyche is not too injured. If not then things can get far much worse and for a very long time. All it takes is leadership and brain trust to administer the shock therapy and get things rolling again. If we get the timid half measures like what the Haiti mulatto elite did in Haiti allowing Papa Doc to outsmart them and build a personality cult and the rest is history. In Haiti it was the same dynasty versus hustler nonsense debates that we are having in KE. The problem of ZIM and SA is the same timid half-measures instead of shock therapy. Argentina's Macri also realized gradual reforms don't work. Whether KE demographic dividend is harnessed is largely a leadership issue. That's why I said in another thread that watching the next 32 months will be interesting. It's important to watch the direction younger voters will take before committing an investment decision. Not quite. Deferring to leaders/politics in nation building is what is referred to as the messiah syndrome. Nation building is much more complex than that and it barely works without the people's input both implicitly and explicitly. If and when the social and economic glues that hold a people together dissolve or get disorderly then it doesn't matter who is at the helm...they will have a very tough and short ride. Two cases in point; in Ethiopia despite the credentials and attempted 'shock therapy' by the current PM, it probably won't amount to much. In any case the country is likely headed for civil war or secession. In Lebanon, with a debt to GDP of 150% and bond yields commanding upwards of 100% no leader will last long for the foreseeable future aka if you go the populist way you are doomed coz it will only make things worse, if you go the austerity way the short term pain will likely get you ousted. The latter was the case in Argentina not coz of half hearted measures but economic frustrations and they've now flipped to populism on which the clock is fast ticking. The same country ploughed through 5 presidents in 10 days when they defaulted on a sovereign bond back in 2001. In the developed world, Italy has had 6 prime ministers since the European debt crisis. For Australia it is six since the GFC. One of the the undercurrents that goes unnoticed in the USA is the building up of social tension towards some sort of crescendo that will implode in a very nasty manner. It is worth noting here that economic trends precede social trends and thereafter political ones. How for example would you get to raise KE savings rate from the current 11% to the recommended 30% by change of leadership? You can hardly move the needle without a cultural revolution on fertility perceptions. If the current economic malaise is severe( pronounced desperation) for KE then look forward to a radical left leader. If it is mild/moderate then a center right is the likely result. From there onwards, it becomes a rabbit hole of sequential choices that either work in your favour if the underlying economic and social trends are working in your favour or they blow up in your face you are running counter-trend. The main purpose of the stock market is to make fools of as many people as possible.
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Rank: Elder Joined: 9/23/2010 Posts: 2,218 Location: Sundowner,Amboseli
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MPC lowers cbr by 50bps to 8.5%.Quite conservative i must say but atleast it shows the direction going forward. @SufficientlyP
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Rank: Elder Joined: 12/7/2012 Posts: 11,901
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THE FINANCE ACT, 2019 Here is a recap of the key tax measures that have now come into force that will soon have a dent on you and your business. 1. Import Declaration Fee (IDF) has been increased from 2% to 3.5% 2. Railway development levy has also risen from 1.5% to 2% 3.Turning to motor vehicles, excise duty on petrol-engine vehicles over 3000 cc as well as diesel-engine vehicles over 2500 cc is now at 35% 4.Excise duty on vehicles over 1500 cc has been raised from 20% up to 25% 5. Excise duty has also been introduced on bottled water, non-alcoholic beverages and cosmetics with the introduction of excise stamps. 6. Excise duty on cigarettes and wines is up 26% while excise duty on spirits is up 44.5% 7. In order to encourage the manufacturing of gas cylinders locally, excise duty on imported gas cylinders has been raised to 35%. 8. Digital transactions will also be subject to value-added tax at the rate of 16%. 9. For micro, small and medium enterprises, the taxman will require you to pay a turnover tax at the rate of 3% In the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
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Rank: Veteran Joined: 11/13/2015 Posts: 1,569
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Angelica _ann wrote:THE FINANCE ACT, 2019
Here is a recap of the key tax measures that have now come into force that will soon have a dent on you and your business.
1. Import Declaration Fee (IDF) has been increased from 2% to 3.5%
2. Railway development levy has also risen from 1.5% to 2%
3.Turning to motor vehicles, excise duty on petrol-engine vehicles over 3000 cc as well as diesel-engine vehicles over 2500 cc is now at 35%
4.Excise duty on vehicles over 1500 cc has been raised from 20% up to 25%
5. Excise duty has also been introduced on bottled water, non-alcoholic beverages and cosmetics with the introduction of excise stamps.
6. Excise duty on cigarettes and wines is up 26% while excise duty on spirits is up 44.5%
7. In order to encourage the manufacturing of gas cylinders locally, excise duty on imported gas cylinders has been raised to 35%.
8. Digital transactions will also be subject to value-added tax at the rate of 16%.
9. For micro, small and medium enterprises, the taxman will require you to pay a turnover tax at the rate of 3% Handcheque#
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Rank: Veteran Joined: 9/18/2014 Posts: 1,127
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Sufficiently Philanga....thropic wrote:MPC lowers cbr by 50bps to 8.5%.Quite conservative i must say but atleast it shows the direction going forward. Very conservative but I don't think even a 200bps cut will make a dent in increasing credit growth in this environment of fiscal dominance. Working with the CRR might be a more fruitful venture as it gives banks additional liquidity to grapple with and even then an uptick in lending will be minuscule. This is a risk off economy and banks have been restructuring loans for the better part of the last five years aka managing the loan book...dont expect them to go gung-ho into new lending which only adds to their already existing headaches. The CBR at this point is more important in KES management than anything else. It will be interesting to see whether cbk will exercise restraint when KES depreciates vis a vis trying to prop up the economy. The main purpose of the stock market is to make fools of as many people as possible.
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Rank: Elder Joined: 10/18/2008 Posts: 3,434 Location: Kerugoya
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Quote:A row over who owns Kenya’s land is making life hard for foreign firms
Kericho, the capital of Kenya’s tea country, is a verdant spot.
Emerald-green estates stretch as far as the eye can see, hugging the western escarpment of the Rift Valley.
Set 7,000 feet above sea level, the climate is perfect for growing tea, Kenya’s biggest export, which fetched $1.4bn last year.
For Paul Chepkwony, the governor of Kericho County, these plantations are a reminder of the way the British stiffed his Kipsigis tribe of their land.
Under British rule the colonists took half the land on which the Kipsigis grazed their cattle, turning it into tea estates.
Mr Chepkwony demands that the British government pay compensation to 115,000 Kipsigis and their descendants, who lost their land. (It will not.)
Mr Chepkwony also says that a ruling in February by the new land commission allows him to increase land taxes on tea estates and demand a preposterous $20bn or so in profits that he claims were illegally acquired—equivalent to nearly a quarter of Kenya’s annual gdp.
The burden, he feels, should fall primarily on three firms that grow tea on disputed land: Finlays, Unilever and George Williamson.
If they cough up, they would be welcome to stay on as tenants of the Kipsigi people, he says.
To Mr Chepkwony’s irritation, the multinationals are not playing ball.
They have resisted his demands to surrender their title deeds for inspection.
They have also challenged the land commission’s ruling.
Kimutai Bosek, the governor’s legal adviser, warns that such recalcitrance could prompt frustrated Kipsigis to take the law into their own hands.
The tea companies do not take such threats lightly.
In June the governor of a neighbouring county led an invasion of an estate, uprooting tea bushes.
Historic land disputes are vexing multinationals in other sectors, too.
Kakuzi, a big British agricultural firm, and Del Monte Kenya, which grows 13,000 acres of pineapples, have faced demands to surrender large chunks of their plantations.
County governors are also using their new powers to make life difficult off the farm.
Tata Chemicals, an Indian soda-ash miner, has been slapped with a $166m land-tax bill it says it cannot pay.
Local politicians are also complicating things for Tullow, an Anglo-Irish company trying to extract oil in northern Kenya.
All this leaves Uhuru Kenyatta, Kenya’s president and Jomo’s son, in a bind.
Aside from fears that those with land grievances could one day turn to his family’s vast holdings, he presents himself as a champion of foreign investors.
Yet, preoccupied by a power struggle in his government and wary of alienating voters ahead of an election in 2022, Mr Kenyatta has remained aloof.
His silence may damage the economy.
Multinationals are not just big taxpayers but also sizeable employers.
Del Monte is Kenya’s largest exporter of canned pineapples.
Nearly two-thirds of tea processed by big firms comes from smallholders.
When landless peasants organised by the ruling party seized big commercial farms in Zimbabwe, the economy collapsed.
Some say Kenya’s land commission should look at under-utilised farms owned by politicians.
Or that Mr Kenyatta could do more good by reducing corruption, boosting urban employment and helping smallholders make their farms more productive.
Many Kenyans have legitimate land grievances, but making implausible demands of profitable firms does not seem the best way of addressing them. Source Link Click "Skip Ad" to read the full story.
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Rank: Elder Joined: 9/23/2010 Posts: 2,218 Location: Sundowner,Amboseli
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lochaz-index wrote:Sufficiently Philanga....thropic wrote:MPC lowers cbr by 50bps to 8.5%.Quite conservative i must say but atleast it shows the direction going forward. Very conservative but I don't think even a 200bps cut will make a dent in increasing credit growth in this environment of fiscal dominance. Working with the CRR might be a more fruitful venture as it gives banks additional liquidity to grapple with and even then an uptick in lending will be minuscule. This is a risk off economy and banks have been restructuring loans for the better part of the last five years aka managing the loan book...dont expect them to go gung-ho into new lending which only adds to their already existing headaches. The CBR at this point is more important in KES management than anything else. It will be interesting to see whether cbk will exercise restraint when KES depreciates vis a vis trying to prop up the economy. Quite some work there cut out for them. As i write this, KES has lost some ground since the CBR cut....we are currently down to 102.3 vs 101.15 pre CBR cut. And we are talking about a meagre 50bps. @SufficientlyP
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Rank: Veteran Joined: 11/13/2015 Posts: 1,569
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 savage Quote:Central Bank of Kenya (CBK) Governor Patrick Njoroge has accused suspended Treasury Cabinet Secretary Henry Rotich of distorting revenue figures.
Dr Njoroge yesterday said the misrepresentation of numbers by the embattled official had driven the government on a borrowing spree.
In a rare bare-knuckle attack on Rotich’s tenure, Njoroge described Treasury’s budget-making process as “abracadabra”, where revenue numbers were randomly included in the budget books “from thin air.”
The governor described the revenue shortfalls by Treasury that resulted in a borrowing spree as “parte after parte” in street parlance.
“There was a lot of abracadabra,” said Njoroge of the budget-making process that was overseen by Rotich and his Principal Secretary Kamau Thugge.
Njoroge spoke at a press briefing in his office a day after the Monetary Policy Committee slashed the benchmark lending rate from nine per cent to 8.5 per cent. https://www.standardmedi...racadabra-budget-figures
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Rank: Veteran Joined: 11/13/2015 Posts: 1,569
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CBK governor was on a roll yesterday  Quote:“If the government is short of revenues and wants in a sense to assault the CBK and grab whatever resources there are, that has never worked and will never work,” Dr Njoroge said at the Monetary Policy Committee press briefing on Tuesday.
“Such bailouts monetise the deficit one to one which means the central bank prints money, it will be printing money to cover the deficit and would draw the central bank as a conspirator in fiscal decisions this will subordinate the central bank to fiscal decisions and political imperatives,” he said Quote:CBK trades in Treasury bills under its name to reduce or increase money supply in the economy.
“There were concerns that we also have been commanded to surrender T-bills that we hold. So just like Kenya oil or some parastatal we are thrown into this ring and forced to surrender. That couldn’t be further from the way things work, we do not operate under those sort of regimes,” Dr Njoroge said
“If decisions are made in smoke filled rooms by people who want to send rockets to the sun they end up with those figures. We follow specific laws and we have been doing it for 54 years,” he said. https://www.businessdail...363896-17xt2t/index.html
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Rank: Elder Joined: 9/23/2010 Posts: 2,218 Location: Sundowner,Amboseli
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Why can't we have Opus Dei lead this country??? @SufficientlyP
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Rank: Veteran Joined: 9/18/2014 Posts: 1,127
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wukan wrote:CBK governor was on a roll yesterday Quote:“If the government is short of revenues and wants in a sense to assault the CBK and grab whatever resources there are, that has never worked and will never work,” Dr Njoroge said at the Monetary Policy Committee press briefing on Tuesday.
“Such bailouts monetise the deficit one to one which means the central bank prints money, it will be printing money to cover the deficit and would draw the central bank as a conspirator in fiscal decisions this will subordinate the central bank to fiscal decisions and political imperatives,” he said Quote:CBK trades in Treasury bills under its name to reduce or increase money supply in the economy.
“There were concerns that we also have been commanded to surrender T-bills that we hold. So just like Kenya oil or some parastatal we are thrown into this ring and forced to surrender. That couldn’t be further from the way things work, we do not operate under those sort of regimes,” Dr Njoroge said
“If decisions are made in smoke filled rooms by people who want to send rockets to the sun they end up with those figures. We follow specific laws and we have been doing it for 54 years,” he said. https://www.businessdail...63896-17xt2t/index.html Whoa! I hope this not all bark and no bite coz those assaults will keep coming more so when the cookie crumbles. The main purpose of the stock market is to make fools of as many people as possible.
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Rank: Elder Joined: 10/18/2008 Posts: 3,434 Location: Kerugoya
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Sufficiently Philanga....thropic wrote:Why can't we have Opus Dei lead this country??? I have just had a wild thought. Supposing when his tenure at Central Bank is over and he is appointed The Minister (This BBI Manenos) For Finance and an Ex Official Mpig (Again this BBI Manenos)? Would he change his tune? Just a thought, just a thought
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Rank: Elder Joined: 10/18/2008 Posts: 3,434 Location: Kerugoya
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lochaz-index wrote:wukan wrote:CBK governor was on a roll yesterday Quote:“If the government is short of revenues and wants in a sense to assault the CBK and grab whatever resources there are, that has never worked and will never work,” Dr Njoroge said at the Monetary Policy Committee press briefing on Tuesday.
“Such bailouts monetise the deficit one to one which means the central bank prints money, it will be printing money to cover the deficit and would draw the central bank as a conspirator in fiscal decisions this will subordinate the central bank to fiscal decisions and political imperatives,” he said Quote:CBK trades in Treasury bills under its name to reduce or increase money supply in the economy.
“There were concerns that we also have been commanded to surrender T-bills that we hold. So just like Kenya oil or some parastatal we are thrown into this ring and forced to surrender. That couldn’t be further from the way things work, we do not operate under those sort of regimes,” Dr Njoroge said
“If decisions are made in smoke filled rooms by people who want to send rockets to the sun they end up with those figures. We follow specific laws and we have been doing it for 54 years,” he said. https://www.businessdail...63896-17xt2t/index.html Whoa! I hope this not all bark and no bite coz those assaults will keep coming more so when the cookie crumbles. I am much more worried that the Njumbiri Regime would "revisit" the way they are revisiting Justice Maraga and his "Wakora" team.
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Rank: Veteran Joined: 4/16/2014 Posts: 1,420 Location: Bohemian Grove
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[quote=wukan]CBK governor was on a roll yesterday Quote:“If the government is short of revenues and wants in a sense to assault the CBK and grab whatever resources there are, that has never worked and will never work,” Dr Njoroge said at the Monetary Policy Committee press briefing on Tuesday.
“Such bailouts monetise the deficit one to one which means the central bank prints money, it will be printing money to cover the deficit and would draw the central bank as a conspirator in fiscal decisions this will subordinate the central bank to fiscal decisions and political imperatives,” he said Quote:CBK trades in Treasury bills under its name to reduce or increase money supply in the economy.
“There were concerns that we also have been commanded to surrender T-bills that we hold. So just like Kenya oil or some parastatal we are thrown into this ring and forced to surrender. That couldn’t be further from the way things work, we do not operate under those sort of regimes,” Dr Njoroge said
“If decisions are made in smoke filled rooms by people who want to send rockets to the sun they end up with those figures. We follow specific laws and we have been doing it for 54 years,” he said. https://www.businessdail...63896-17xt2t/index.html[/quote] *mic drop*
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Rank: Elder Joined: 4/22/2010 Posts: 11,522 Location: Nairobi
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Sufficiently Philanga....thropic wrote:Why can't we have Opus Dei lead this country??? Ummmh I am very sure you know the answer... 🤷🏽♂️🤷🏽♂️🤷🏽♂️🤷🏽♂️🤷🏽♂️🤷🏽♂️ possunt quia posse videntur
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