If you were ever thinking that Beijing would loan and build without consequence. Those days should long be gone. The Chinese are planning to earn money on their investments, they don’t care about the Republic’s they are investing in, as long as they are profits on their investments. They want earn on these loans and since the rate of loans are so high. They are now starting to pick collateral for their infrastructure loans, especially the draining of loans to the Standard Gauge Railway (SGR).
“While acknowledging China’s leading role in the Kenyan economy as a trading partner, the President called for increased Chinese investments in the country. “China now ranks as the number one trading partner with Kenya accounting for 17.2% of Kenya’s total trade with the World,” he said. “Kenya is open and safe for business. Kenya has one of the most conducive business environments in Africa,” the President added” (President.Go.Ke – ‘President Kenyatta Asks China To Give Preferential Treatment For African Goods’ 02.11.2018).
While Kenyatta are acting as it all positive, the reality is that the state are having giant issues with their “investments” and loans there. But Kenyatta wants to make it sound positive, when it really isn’t, just the rate of the loans have grown and the consequences of the relationship with China is now starting to cost. It is the Kenyans that has to pay these loans down and with every way possible. As the Chinese has leverage over the Kenyan government. Take a look at these quotes from media recently!
Loan Rate in Kenya:
“Kenya’s current public debt stands at approximately 4.884 trillion Kenyan shillings (USD$49 billion) or 56.4% of the country’s gross domestic product.. This is up from 42.8% in 2008. In other words, the country owes more than half the value of its economic output (GDP)” (…) “China is Kenya’s largest creditor, holding about 72% of the country’s bilateral debt as of March 2017. Studies show that Kenya’s Chinese debt poses a threat because the loan agreements are not transparent, projects are not well prioritised, accounting procedures are weak and it’s not clear what projects are costing” (Odongo Kodongo – ‘Kenya’s public debt is rising to dangerous levels’ 05.08.2018).
Selling State Owned Enterprises:
“The Privatisation Commission has approved sale of 26 state-owned corporations to raise funds to support the budget. The commission, under the Privatisation Act, 2005, was mandated to sell 26 poorly performing state corporations to cut down government spending. Those approved for sale are National Bank of Kenya, Consolidated Bank of Kenya, Kenya Meat Commission, Development Bank of Kenya, East African Portland Cement, Kengen, Kenya Pipeline Corporation, Kenya Ports Authority, and five sugar millers — Chemilil, Sony, Nzoia, Miwani and Muhoroni. Others are Agrochemical and Food Corporation, New Kenya Co-operative Creameries, Numerical Machining Complex and Isolated Power stations, hotels (Kabarnet Hotel, Mt Elgon Lodge Ltd, Golf Hotel Ltd, Sunset Hotel Ltd and Kenya Safari Lodges and Hotels Ltd). Also targetted are Kenya Tourism Development Corporation-associated companies, which include International Hotels Kenya Ltd, Kenya Hotels Properties Ltd, Mountain Lodge Ltd and Ark Ltd” (Cynthia Ilako – ‘State to sell 26 companies to finance current budget’ 03.11.2018, The Star Kenya).
China Selling Infrastructure Loans to Investors:
“The plan will see Hong Kong mortgage insurer Hong Kong Mortgage Corporation (HKMC) buy a diverse basket of infrastructure loans next year and explore the idea of “securitising” or repackaging them into securities for sale to investors, allowing it extra liquidity that it can loan out to finance more infrastructure projects. “This initiative we believe will help ‘recycle’ commercial banks’ capital to be redeployed into other greenfield infrastructure projects, besides enabling wider capital markets participation in infrastructure development under the Road and Belt initiative,” said HKMC Greater China chief executive Helen Wong” (Allan Olingo – ‘China plans to sell off its African infrastructure debt to investors’ 05.11.2018).
We are seeing the growth of loans, that is up 42,8% and the debt level of the 56,4% of the GDP. Because of that, the state are now selling of their State Owned Enterprises. Most likely to Chinese holding companies and investors, who are expecting to gets points on their dollars. As well, as securing their future on the investment. They are selling the central institutions and businesses, which was state controlled, but they will now become para-stalls of the Chinese.
But selling the institutions are not enough for the Chinese. They are planning to take it further. Planning to rehash the loans as sub-prime loans for investors, meaning they are taking the risk instead of the Export-Import Bank of China, where the loans are usually collected and distributed from. Therefore, the loans are another target of more profits as they want to earn on them as well into the Capital Market. Just like the US Banks did with House Loans and mortgages in the past.
While all that is happening and with the knowledge of this, the President is still keeping it cool. Kenyatta is still not saying the brazen truth, that they are a debt-slave to China. Are in such big trouble, that the investment of the SGR are killing the economy and they have to trade-off their assets to keep up with their payments. That is what is happening and this is not really developing, but hurting the economy even more. As this institutions and businesses has been controlling their markets. Now, they will have masters from outside, which are not there to secure the market, but make a direct profit. Therefore, the citizens are not only paying their loans for the railroads, but for destroying their economy. Peace.
Somewhere in between Eldoret and Nairobi, the Life Style Audit got lost. It was supposed to be launched this mid-June 2018. Since then it been just hot-air and nothing proven, the authorities and the public officials haven’t been touched. Neither have senators, cabinet secretaries or even representatives in the national assembly, neither have any of the county officials or leaders of the state owned companies. All of these have been left untouched and it has just been words from the Jubilee Administration and leadership itself.
“Kenyan President Uhuru Kenyatta on Thursday announced that all public servants including himself and his deputy will undergo lifestyle audit as part of efforts to fight rampant corruption in the country. Kenyatta said in a statement that the public servants will be asked to explain the source of their wealth and those found culpable with the plunder of national resources will be required to defend their source of wealth. “You must be able to explain how you got your car, your house and land in comparison to what you earn,” Kenyatta said in the coastal city of Mombasa after launching a key road project” (Xinhua, 2018).
President Uhuru Kenyatta and Deputy President William Ruto have been all talk and no play. Because, they know that if they are really looking into it, they might end up finding more trouble than it is worth. The Jubilee administration have been fabulously oblivious to it all.
It is now soon August 2018 and two months has gone without any action. That is natural, as the Life Style Audit would hurt their allies and the inquiry into the funds would hurt themselves. They would reveal the money trail, the cartels of sugar and imports, it would reveal how the money is moving from the state to shareholding or shell-corporations that doesn’t exists. Clearly, the Jubilee don’t want that, they don’t want to reveal where all the money goes.
We will certainly wait forever, because the state don’t want their closest allies into trouble, neither their support or the cronies hurt. They are all there because of the Jubilee and don’t want to loose them now. That will just hurt their base and their network of power. Therefore, the postponement of the audit is the reason for this.
Kenyatta and Ruto have really planned this inaction… they are officially launching it, but will not really do it. Since that will just hurt themselves and who is foolish enough to hunt after their own. They will not do that and they would not criminalize and detain their own. That is not how it works, even if the Jubilee are clearly more corrupt, than in the past. Peace.
Xinhua – ‘Kenya orders lifestyle audit of all public servants to curb graft’ 16.06.2018 link: http://www.xinhuanet.com/english/2018-06/15/c_137254473.htm
After the 9th March handshake between ODM and NASA Principal Raila Odinga and Jubilee leader and President Uhuru Kenyatta. Both of them have worked together with the Building Bridges initiative. This have not only changed the dynamics within the NASA and with the leadership there, as the NASA Co-Principals Moses Wetangula, Musalia Mudavadi and Stephen Kalonzo Musyoka. Who all was left behind by the handshake, just as Odinga was left behind on the Swearing-In on the 30th January 2018. Therefore, this shouldn’t matter now, but is just mere politics and who gets the upper-hand.
Odinga got the upper-hand and left the other Co-Principal behind. It was dead on revival with that handshake. The President got the NASA under his wings without paying much and with co-operation directly with Odinga. Therefore, the problem now, is that Odinga has no official title or place, but is still accepted as a big man.
That is why I am starting to wonder, because he has been as an official ambassador-at-large in South Africa, Sudan and in India. This combined with the statement of making changes in government, like the fights against corruption and stopping it. You can start to wonder what Odinga does and what is his part now. Since he is vocal, but also are acting as a public official like abroad.
The President Kenyatta and Deputy President Ruto has their part, the same has the rest of the cabinet, the other appointed officials and appointed leaders of state owned enterprises, but Odinga has no official title. Odinga cannot just be running cat-and-mouse after Kenyatta.
I wonder if he has the perks of a public official? I wonder why he hasn’t a title? Because James Orengo is the head of the Opposition in the Senate, but if the Odinga is part of the government and working as a part of government, how can fellow party members in Parliament be “opposition” leaders?
Because, it seems more and more like an unofficial Prime Minister under Kenyatta and Ruto, but not as a Cabinet Secretary in the Cabinet of the Jubilee. He should be sworn-in and appointed to something, especially when he is traveling as a representative to the India, South Africa and Sudan.
I don’t feel by how he acts and performs as the long-arm of the government, but not as the opposition. Odinga is more than an opposition figure, he is not directly there. The Building Bridges Initiative and activity proves that.
Therefore, what is the stance of Jubilee Administration and Kenyatta, what should they do about this? Because Odinga is clearly in cahoots with them, but nothing more official than the handshake and the agreement.
They shouldn’t trick the public, but offer the public the real deal and show good governance. Peace.