Opinion: Kenyatta there is no free lunch

We thank the officers of the United Nations and all development partners who have been close collaborators but at this juncture I must make it clear that while we appreciate your support and look forward to your collaboration you must remember that Kenya has its owners, and its owners are 50 million Kenyans, I ask you to refrain from trying to direct us in which way we should go. We are clear on where we want to go. We ask you to join us, to support us in that endeavor. But do not interfere because we shall not allow for you to dictate to us which direction that should be” – President Uhuru Kenyatta on the 4th December 2020

The idea that President Kenyatta comes with, I understand the sentiment and the ideal of acting as a sovereign and act as an independent state. As the Head of State … Kenyatta knows this too. The state his running is dependent on donations and aid. That is well known, as well as most of development expenditure is using foreign funds.

That’s why when you receive other people’s money and from foreign organizations. There will be strings attached to that money. The state who receives that money has to comply to a set of rules, regulations and deliver reports on the spending. This is happening because the state took the money and after that they have to prove the value for money.

Someone like Kenyatta should know this. The United Nations, Multi-Nationals and Foreign Donors are not doling the money out without any strings. This means that if the Kenyan state takes the money. They have to comply with the stipulations of the funds or the direction which they were intended to be spent.

If Kenyatta wants the state to be fully independent and sovereign he shouldn’t accept the money. The man shouldn’t even take the grants, donations or the development funds if they are putting strings on his actions.

President Kenyatta shouldn’t be dependent on it then. If you take other people’s money … there will expectations and directions coming with it. Yes, the Kenyan state is sovereign and can self rule. However, when you take funds to cover deficits and create development projects. These funds will steer the conversation, as these monies aren’t given out for F-R-E-E.

So, if Kenyatta doesn’t want to be told how to spend. Then he should add his own state revenue and tax-base so that he doesn’t have act out like this.

President Kenyatta there is no free lunch. You expect that money grow on trees and just get dropped in your hands. That’s not happening… Kenyatta, better buckle up and smell the coffee. Since, the reality is that the state can grow on its own. However, then you should stop the dependency of foreign donors. If you want to steer the ship without anyone telling you the direction. Peace.

Kenya: CS Ukur Yatani – National Treasury & Planning – Media Report on G20 Debt Service Suspension Initiative (20.11.2020)

The NRM lacks Fiscal Responsibility!

There been so many times the National Resistance Movement (NRM) apologists and defenders have claimed the opposition lacks Monetary Polices. However, contrary to public belief or perception it seems like the NRM is failing on this themselves. It is very simple reason for all of this.

The NRM and the Government of Uganda, which is the legal entity and de facto legitimate state at the moment. Have the power to borrow, loan and get funding for their operations. They can budget and make monetary policies. The government can make it possible to inject and add stimuli to the economy as a whole. That is what is happening all the time, but it is also very important. That if they fail to do it properly. It can have dire consequences.

One key aspect the NRM and its government have failed over time is to show fiscal responsibility or balance its budgets. The NRM regime have been borrowing and been deficit financing. They are in a cycle of loans financing old loans. They are adding debt burdens to build roads, pay salaries and do basics of the state. While nothing having funds to cover the shortfall and the interests. This is why fiscal responsibility is so important.

On EconomicsHelp.org it states that Fiscal responsibility is defined as this:

Fiscal responsibility implies a government pursues the appropriate level of government spending and tax to:

– Maintain sustainable public finances.

– Ensure fiscal policy aids the optimal rate of economic growth.

– Maintain appropriate levels of public investment” (Tejvan Pettinger – ‘Definition of fiscal responsibility’ 13.10.2020).

It is very simple concept. To be fiscal responsible isn’t an revolutionary act. It is initially only spending the money you have and not spend other people’s money. Know what sort of revenue you do have and not expect a sudden miracle of funds appearing out of nowhere to cover a possible shortfall or lack of funds. This is how the NRM has practically operated.

They have needed loans for any sort of project. The NRM have tried to add their tax-base, but at the same time drained the economy. While spoiling itself and adding more and expenses. When they are not generating more natural income. The plus and minuses isn’t adding up. The state is also anticipating more loans, paying more interests and not paying civil servants.

Civil servants, the local government officials, the teachers, nurses and such needs their salaries to sustain a living. That salary pays the overhead, the food on the plate and other expenses. Some of this money will be returned back in taxes and VAT. Therefore, the state will return some of the funds.

This is why the state has really outplayed itself. When its living on borrowed money and donor grants. The state isn’t sufficiently run, when the funds dries up like this. When the state have to issue suspension of paying out salaries and expenses. Except for a handful of cronies, the army and law enforcement. That isn’t a sign of strength, but of weakness. This is basic governing.

The government who governs should be able to plan, secure and add enough revenue to able to pay salaries to its civil servants. If they are not paid? Why should they go to the office? They should be farming instead or work for a public company instead with their experience and skills. It is a waste to be a civil servant, if it doesn’t pays. The mortagage, the plate for supper and the UMEME doesn’t stop asking for money. The bills will continue to come. The landlord can knock on your door and give you an eviction notice.

That is why this is failing the basics. To not balance the budget and be fiscal responsible. It isn’t a magic masterpiece or an unbearable task. To explain what the NRM has done for years. Instead of spending within their means. They have instead been spending like an alcoholic, being buzzed drinking at the bar with no coins in your pocket, but hoping someone else is paying your tab. Peace.

RDC: Compte Rendu de la 50eme Reunion du Coseil des Ministres (25.09.2020)

Zambia: Ministry of Finance – This Annoncement does not Constitute a Solicitation of an Offer to Sell or Recommendation to Purchase the Notes Referred to in this Announcement or any other Securities. The Consent Soliticiation is not being made, and this Announcement shall not be distributed, in any jurisdiction in which such Soilicitation of Consent is not in Comlianece with the Laws or Regulations of such Jurisdiction (22.09.2020)

Kenya: Council of Governors (CoG) – Re: Impending Shutdown Occasioned by Lack of Resources (16.09.2020)

A Trillion Shilling to cover three days [A Treasure Chest for 2021 Elections?]

A fiscal year in Uganda runs from 1st July 2020 to the 30th June. What is really rare is that the Parliament and the Government gave itself a Supplementary Budget on the 26th June 2020 to cover arrears of supposed 1 trillion shillings. These funds are to paid out in the budget year and cover expenditure not hold. It is really sketchy do that so late in the budget year. As this is the end of the Fiscal Year of 2019/20 and days ahead of the 2020/21.

So in a budget of about 34 trillion shillings, the state needed another 1 trillion in the end. Meaning the budget wasn’t prepared correctly since they needed to amend it to this extend. To add yet another trillion shillings like it was nothing.

What is striking is how easy it is to adjust the cash balance, the fiscal year and the supplement budgets. These are easily voted through and the money doled on whatever. This time it wasn’t paying the water-bills of the State House. However, other random projects of the state. Which suddenly lacking funds. It just appearing right that and just right now. It was needed to be done now. In mind that it wouldn’t look to bad or be able to keep this accountable for later.

That you need a trillion shillings this late in the fiscal financial year is sketchy at best. Especially considering the implication of a new financial years just days ahead. These sort of arrears should be considered into the next financial year. If these numbers are real and have a basis. It could just be taken out of thin-air and cover whatever else the state needs ahead of campaigns and elections. These years are always more expensive and a trillion shillings for the campaigns wouldn’t be far fetched. To cover added expenses, cars for VIPs and such. Which comes with every single election.

The President, the Office of the President, State House and Office of the Prime Minister would suddenly eat more food and expand their organization. As it has to pay off cronies, new allies and ensure the electorate get a pinch of the future middle-income country. They get some soap, food and small tokens to carry them for the next four years. This is what they always do. Some even come with a few thousand or a thousand shillings as a part of the NRM Village Project Outreach, which it also does during elections.

None of the added expenses is cheap. It cost to be king. The king needs to give the public, food and circus. That is what he does and it continues the way it has always done.

The NRM, the President and the whole team passes this along. Knowing there will be no overlook or accountability over the sudden 1 trillion shilling added in the end of this fiscal year. Not like these billions here and there couldn’t end elsewhere. As long as they are voted for and can be used by the state to campaign.

The General Election is coming up and the incumbent needs a treasury chest. If there ever was one. The one trillion shillings would be helpful to run an campaign. I wouldn’t be shocked if it went missing and was used for campaigns. That would be just another day in the Republic. Peace.

The Art of Deficit Financing: Budget 2020/21

Deficit financing, however, may also result from government inefficiency, reflecting widespread tax evasion or wasteful spending rather than the operation of a planned countercyclical policy. Where capital markets are undeveloped, deficit financing may place the government in debt to foreign creditors. In addition, in many less-developed countries, budget surpluses may be desirable in themselves as a way of encouraging private saving” (Encyclopaedia Britannica – ‘Deficit financing’ (25.08.2015).

What is striking from the 2020/21 budget is that its not only 45 trillion shillings, but the way they are financing this spending. Because, the budget need financing or revenue to pay the expenditure. You cannot use air to pay the bondsman. The people you owe money or supposed to spend on needs real cash-flow and liquidity to be fiscal responsible.

What we learned again is the debt deficit financing, which has been common staple in the Republic. Since domestic revenue or tax revenue is about 20 trillions shillings. This means that the rest of the budget has to paid for in various of other ways. In this regard, the state are borrowing, refinancing and gaining more debt. As the state is also wasting more of the budget on paying interests.

This is really making a evil circle and continuing debt trap. Even if the trillions upon trillions owned by the state is growing. That this still haven’t hit a debt ceiling. However, the issue here is the amount of paying interests. They are wasting away money on paying for old loans. This is what the state is initially offering. While it is gaining new debt to finance the over-expenditure today.

When the state pays 4 trillion shillings (9% of the budget) in interests. That shows how destructive this is for the budget. How important it has become. When 1 in 10 shillings of the budgets are paid in interest. This money could have been spent in all parts of society. It could have changed people’s lives and invested in the future. Instead its paying on the debt trap created by the same state.

Deficit financing and refinancing will only ensure the future generations are paying for the growing debt created by the current government. They are borrowing on the future growth and supposed revenue. Even as the state is ballooning the budgets, that they are not able to cover more than half. That is worrying and should worry the republic too.

Yes, that budgets get ballooned in election years are common. That the budgets are insincere and write of taxes in these years are typical too. All of this isn’t new. It is what happens when the Republic is preparing for elections in the coming year. Therefore, the state needs a treasure chest to bling out on chiefs, voter tourism and whatever else to look good for everyone.

That is why this budget is like this. We can clearly see that the state are continuing to acquire more debt, which means the interest payments will grow every year. This is why the refinancing and growing debt should worry everyone. Because, just like the interests payments are now at 9% or 4 trillion shillings this year. We can wonder how it will look when the grace-periods of several of loans are over and the initial price of these as well.

The Republic of Uganda deserves better, but the leaders and the ones in-charge are making it like this. They are not concerned about the future and that is very clear. As they are spending and squandering away the future today. Then someone have to pick up the tab in the future. Peace.

Kenya: Head of Public Service Dr. Joseph Kinyua letter to all CSs – Executive Order No. 1 of 2020 – The Organization of Government (27.05.2020)

Opinion: The government have money [unless your not a priority]

Let me just say, that tonight, this evening I am tired of reading headlines from various of Republics and Countries where they state they don’t have funds for pledges nor supposed basics during this global pandemic. Yes an global pandemic of COVID-19 or the Coronavirus isn’t a planned affair, unless your a conspiracy theorist who makes up ghost stories out of thin air. The rest of us lives in reality and try to figure the best way out of this.

What is boring in these troubling times is when the state says they doesn’t funds for PPE, Masks, Medicine, Salaries for Front-Line workers and whatnot. It is just an endless stream of costs, payments, allocations and expenditure the state has to carry. The imports of sudden extra equipment, ventilators and such. By all means its an expensive enterprise to cover this and ensure enough of the basics. Still, if the people, the citizens and the well-being of them matters. Than this should be shielded first.

However a reason for the lack of funds is that the state hasn’t this as a priority. This isn’t their breadwinner, this isn’t their ballpark. No, this is a side-show, a show where donors, where foreign donations and other comes in to cover the basics and the needed cover. In sunny days this is usually enough, because the ones getting hurt isn’t an priority and the ones whose VIP gets treatment abroad anyway.

That is why the Health Care system isn’t fully functioning nor has the capacity it should have in consideration per capita. The lack of enough beds, ICUs and such are now a contrast to the amount people in the dominion. Therefore, the state has lost the battle, if it gets bad quickly. The state cannot assume they will get help from elsewhere. Since they are already hurting themselves and are damaged by the virus as well.

So in this regard, when the state is complaining and stating lack of funds for this now. Its all about priorities. These states usually has no issues getting loans, grants and donations to cover deficits. They have no issues getting loans and supplementary budgets to secure new revenue-streams in sunny days for infrastructure and development projects. However, securing the well-being of the citizens and their welfare. That is burden it cannot shelter. Not to the max, not to the appropriate levels. That is just to expensive. Unless, a drunk uncle, snappy-nephew or an in-law is kicking in some remitted funds to shelter its own family at family. That is how this goes.

The governments can run their coffers dry, they can create huge deficits in the times of needs. They can boost their stimulus and use the credit, the forecasted revenue and the sales of treasury bonds. All of that cover it in the future, as the government and state can in practicality never cease nor get bankrupt. That as a sovereign state and therefore, has more gains and possible future income to cover debt and deficits.

That is why in these times of need, the government can prove where their loyalty lies. Either its with their citizens or its with the corporate agenda. They can show that solving it and investing in the Health Care system matters.

We can see if it is a priority or just talk. We can see by the pounds sterling, the US dollars or whatever currency spent on it. That its a priority or not. If they priorities it, they are risking a bigger deficit for now. If not, they are shielding the hurt and hoping it just goes back to normal quick. Peace.