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.
The Standard Gauge Railway in the East African Community was all based on if the Chinese counterparts wanted to fund the infrastructure and the grand enterprise of rails in the region. Today, it was revealed, not shockingly that the SGR works in Uganda has been suspended. This after reports in the Daily Monitor revealed this:
“Uganda’s first phase of SGR, the eastern line running from Malaba to Kampala, about 273km (338km rail length), is expected to cost $2.3bn. Mr Kasaija admitted that Uganda has currently taken a back seat on the SGR venture, but will resume “serious discussions once Kenya is about to reach” the Ugandan side. President Museveni, according to sources familiar with the venture, in recent months had been directly involved in discussions on the project, and had hoped to secure financing for the first section of the railway line during his visit to China last month when he attended the seventh Forum on China-Africa Cooperation (FOCAC) summit. But he returned empty-handed. However, Mr Kasaija revealed that during the discussions in Beijing, it was agreed that “Uganda and Kenya will embark on joint financing negotiations” after Kenya has completed the current Nairobi-Naivasha section” (Daily Monitor – ‘Uganda puts SGR on hold over unresolved issues with Kenya’ 30.10.2018, link: https://www.businessdailyafrica.com/news/ea/uganda/Uganda-puts-SGR-over-unresolved-issues-kenya/4003148-4828902-156c5upz/index.html).
I have doubts that it will help reaching more agreements with the Kenyan counterparts at this time. As they have had plenty of agreements, joint communiques and meetings with the Northern Corridor Integrated Project (NCIP), which is going back to 2015. Where there was back in October 2015 on the 11th NCIP Communique, where the document stated: “the summit noted progress made in the finalisation of bankable proposals for some sections and directed the Ministers of Finance, Infrastructure, Attorney Generals, coordinated by the Ministers of Foreign Affairs, to undertake a joint visit to EXIM Bank in China to conclude Financing Agreements” (11th NCIP Summit – Joint Communique’ Safari Park Hotel, Nairobi, Kenya 17.10.2015).
If you follow it clearly, the progress of the 2015 have been stalled or rejected, but the parties still want to pursuit the goal of building the rails. Even as even the Chinese doesn’t believe in it or seeing the lack of fortunes in Kenya to maybe wishing to extend the tracks further at this given moment. What we are seeing is that the Ugandan government has persisted, but not gone through.
They even had the idea of the SGR Railway in the National Development Plan II of 3rd March 2015, which also holds the idea of the rails alive with this statement: “Joint formal agreements for plans to build a new Standard Gauge railway (SGR) have been signed by the EAC Countries. The SGR project starts in Mombasa through Nairobi, Kampala, Kigali and Juba. A cross section of the different routes of the SGR to the South Western, Northern, North Western and Eastern Uganda will aid the mining industry through transportation of equipment and raw materials. The overall objective of the SGR is to jointly develop and operate a modern, fast, reliable, efficient and high capacity regional railway transport system as a seamless single system and as a mechanism to stimulate overall economic development” (NDPII, 03.03.2015). By the way, the implementation of the NDPII is supposed to be between 2015/2016 to 2019/2020 to fulfill the Vision 2020. However, by the SGR failure, this shows the lack of progress and just the major agreements, but not the needed funding or possibility of partners to invest in the huge infrastructure projects the government has.
While on the 3rd of October, the Ministry of Works produced the 14th Joint Transport Sector Review Workshop presentation, where they by June 2018 stated: “The financing agreement for the SGR was not signed. However, negotiations to sign the financing agreement are in advanced stages” (Ministry of Works, 03.10.2018). So, you see, the government knows perfectly well, they cannot and doesn’t have finances for the building of it. It is soon November 2018 and getting closer to Vision 2020, but no sign of a working rails across the Republic. Especially not, when they are waiting for the Chinese to see it as a viable project in the first place.
What the government didn’t tell today or yesterday, is that the Chinese said no a little while ago:
“For it to make business sense, the proposed line has to reach Uganda in order to take over a huge chunk of the haulage business in the landlocked country ahead of the Tanzania-Rwanda SGR line. Uganda is said to have decided to revamp its old metre-gauge railway when it became apparent that the Kenyan line could delay for up to three years. A regional weekly recently reported that the ministers for transport and finance of the two countries were supposed to have engagements with China Exim Bank on the sections of Kisumu to Kampala via Malaba” (…) “This, however, flopped and instead the executives from China Exim Bank flew to Kampala and later Nairobi last November to carry out due diligence on the Uganda project proposal and contract application” (Guguyu Otiato – ‘Worry as China puts SGR funding on hold’ 06.03.2018 link: https://www.standardmedia.co.ke/business/article/2001294667/alarm-as-china-puts-sgr-funding-on-hold).
So, when the government are saying it wasn’t signed, is that the Exim Chinese Bank rejected it and hasn’t accepted the infrastructure project at this point. Certainly, they don’t see it viable or even possible for profits. They have already started in Kenya, but has to finish that part, before they extend to the other Republics in the EAC. Therefore, the SGR is still a dream elsewhere in the Northern Corridor, as they seemed more ready in 2015, than the donors or the development partners ever where. Because the GoU are not ready to finance it self and not have the ability to do so. Without getting funding from the outside. They have to beg for loans and grants to get it. Peace.
The Government of Kenya and the Government of Uganda, should both worry about their arrangements and their growing debts, as the non-sustainable rates of debt and higher interests. As the unnatural growth of the national budget, where the lack of revenue is covered with more state debt. To cover both salaries and development projects. All of this has happen over the recent years. As more and more of the yearly budget goes to pay interest on old loans, as the old loans also mature and the rates will become more dire. As the strength of the economy isn’t going in the same rates as the loans. This is in the end a debt trap. A debt trap China has used in other countries.
Sri Lanka is the recent example, which has come into a debt trap, where the Chinese loans has become so dire, become so big and not able to recover. That the collateral for the state was to favorable lease the harbor of Hambantota to the Chinese. They had too, since they couldn’t repay the creditor from Peking. That should be realization from all the others who borrows big and think that the Chinese will not get something valuable back for their funding.
This should be a warning for the Kenyan and Ugandan counterparts, this should be a warning for President Kenyatta and President Museveni. That is if they care about the state resources, about their minerals and about the possible extractions from their republics. If they want to be debt-slaves, or lease away the crown jewels to the Chinese, because they promised favorable debt plans, that in the end put them in juxtaposition, that they cannot come out off; unless they trade away something very valuable. If that would be licenses to drill oil in Turkana or in Bunyoro.
Who knows what the end-game of these massive loans are and if the Presidents and their parties plans to repay them. Or hope that the next generation will try to invent new way of generating money. If so, then they are saved by rare luck and not by planning ahead. These loans are big and taking bigger and bigger slices of the GDP. They are going far beyond the levels of revenue and possible future forecast of funds. Therefore, the loans can only at this point benefit the ones giving them. They will get the repayments and the interests. If they don’t get that, they will take collateral and take other state entities to get their values back. The Chinese are doing that in Sri Lanka, they could easily do that with Kenya and Uganda too. They are in for the taking and ready to muscled out.
The Chinese doesn’t play and doesn’t play with money, they will recollect and they will recover the funds spent. As they are not playing games, they are really investing and hoping to get paid-in-full. They are waiting for the numbers to go from red to black. They don’t expect to loose, and if they do. They will figure other ways to collect the lost.
President Kenyatta and President Museveni should know this, but I doubt they are thinking in this direction right now. They are eating and not caring, but their states and their economist should worry. As the growing debts has a backside, not only the interests and the lack of development it creates, as they have to find bigger revenue to cover the debt and the mature loans, as they have to settle old affairs and such. They don’t go away or get deleted over nothing. They got to take charge and find a way to solve it.
The Chinese will take advantage if they start to default, if they struggle to pay, which could come, if the loans and the negative spiral of lack of revenue continues. That is if the state doesn’t find ways to repay. Than, the Chinese might take a port, might take state owned enterprise, but surely they will be paid-in-full. Peace.
You know that Kenya Railways Corporation sucks, you know that the Standard Gauge Railways project is fatigued. As the circulations of the Secrecy Agreement that all employees has to sign onto. Which states that the employees cannot tell the truth about the operations or the works of the corporation.
They expect all employees to be strictly confidential about all matters connected with the SGR and the Kenya Railways Corporation. You are not allowed “to record, store copy any information or violating the SGR Operations”. Therefore, the SGR and Corporation are clearly muffling its staff. This includes “participating in negative articles, writings or videoes or photoes on social media or Facebook or Youtube and etc. that involving SGR Operation”. So when the company goes this far, it says how dire the operations are, they cannot be golden, but instead grim.
This is happening after the state orders all Containers from Mombasa to be put on the SGR and also pushing for the public to use the rails. However, it is still not profitable. As the project has been costly and also embarrassing as the grace period for the loans are soon hitting the government. Meaning, the huge loans for the infrastructure investment comes to roost. Therefore, the needs for revenue is even more important. To patch the hurt, before moving on to other projects.
That is why these sort of leaks and showing how far the Company takes it. Shows how bleak the situation is. When they have to muffle and silence the employees. Since the Secrecy Agreement has Chinese signs on them, it could be given by the tendered company, China Communications Construction Company (CCCC), which have the 4 extensions tenders to the previous built railway from Mombasa to Nairobi. Therefore, this could be the direct interference of the contractor CCCC, that would explain why the agreement wrote Youtube as Yutube. Because, that is a site that is banned in China. So, if the CCCC employees wouldn’t know about it and its spelling it would make sense.
Because if the employee was to break the agreement, they would meet the SGR discipline, whatever that means. If that would be termination or put on leave, its hard to know, since their protocols are not out and the KRC/CCCC are not that open on this matter. I am sure they didn’t want the Contracts into the public sphere anyway. Since this is disgusting silencing of the workers and taking away their rights as citizens. This is all communications outside the operations is not allowed. This is not about keeping away company secrets, but keep negative social media impact of the company. However, now that the agreement is out.
I can assure the negative articles will come, not only that the state has order transports of containers directly, that its not profitable and not a wholesome company, instead its a mismanaged State Operated Enterprise (SoE). Surely, the Kenyans should feel betrayed, as they are silenced by outside forces, who are building railways in their republic. The CCCC is acting as kings and they are the servants on the spot. Not allowed to talk or express opinions, just work on the clock and shut-up. That is initially what the contract is saying. Peace.
In the State of the Nation Address, the fifth of his kind, President Uhuru Kenyatta did go into the expected territories, however, he went in one direction I didn’t anticipate. He asked for forgiveness. But as a leader, I hope he acts, because he knows how he came to power for the second term in 2017. We know how he was the loudest voice of discontent, the one who has blatantly disregarded the rule of law, the one that has used the army and the police to hurt civilians. Therefore, the ones that was in-charge of doing these ills should pay for the hurt they caused. Not just, apologize and move-on. Just as if Rail Odinga got his handshake and his role in government, so now he does not care how the Independent Electoral and Boundaries Commission (IEBC) rigged the game. Here is the part of the speech I felt had some values, worth mentioning.
“We also learned, again, a hard truth. Neither peace nor unity are a given; we have to work for them. I say so because last year taught us that if we don’t put an end to unrestrained political competition, it will put an end to Kenya. You saw what happened. In the heat of the campaign, words of anger, malice, and hatred were spoken. Politics was no longer a debate between opponents on issues; it was a clash of irreconcilable enemies. You saw the consequences: lives lost, property destroyed, our unity sapped. I want to be clear here: never again should Kenyan life be lost for politics’ sake; never again should Kenyans’ property be destroyed on account of politics. But that will not just happen on its own. All of us, and in particular we leaders here, will have to admit that last year, we failed in our duty to preserve the unity of this country. And we must make amends. First, I pray that all of us will spend the days and weeks after this address repairing the bonds that frayed last year. Let us apologize for our words, and for the anger and malice that Kenyans heard. From Mandera to Maseno, from Mbita to Mvita, from Lodwar to Lunga Lunga, let us shake hands and embrace our neighbours, and let us celebrate the diversity that is God’s gift to us. Let every leader in the country reach out to our sons and daughters, and remind them that they have it in them to forge a Kenya that speaks gently, that criticizes constructively, and that embraces and respects dissent and competition as healthy and civilized ways of collaboration. And since leadership is best done not by exhortation but by example, let me do as I have asked you to do. If there was anything I said last year that hurt or wounded you, if I damaged the unity of this country in any way, I ask you to forgive me, and to join me in repairing that harm” (Uhuru Kenyatta – State of the Nation Address in Parliament, 02.05.2018).
It is good to hear this from the President, I just hope it is sincere, but if it is, then there is need for action. Not just handshaking Odinga, give him some coins and thinks the families, the tragic deaths that occurred on your watch goes away. All the Extra-Judicial Killings, the big shots who sudden killed days ahead of the elections. Those will be remembered, they will not be forgotten, even if you ask forgiveness. They are still bloodstains on the hands of the President, who hasn’t really done anything to investigate or more like a cover-up to not look into those who has lost their lives. So that he could rule a second term in office.
I wish it was differently, but it wasn’t only innocent civilians that passed away because of protest, police-brutality and electioneering. There was people who mattered and was high upon the food-chain, still the deaths of these lingers on. With many unanswered questions, into the levels, of who paid who and who ordered to send for who? As long as those questions are open, you can wonder if the highest command want it die down and go silent. So that they wont be questioned for their role in their demise.
It is hard to forgive, when your not even trying to cover-up or trying to patch the hurt. You don’t even try to forge or change. Seems like all talk and no play. Since, everything you have done is to pay-off your worst enemy. However, not look into the systemic indifference nor the activity that lead to the demise of the people during the elections. That is because that will hurt your own allies and the dark shadow of your presidency.
Therefore, I don’t expect President Kenyatta to really look into the Police Service, the Military or the Government institutions involved, even investigate into the Cambridge Analytica, the tenders of electoral frauds and the rigging of himself. Since, that will delegitimize his role as the President. It will humiliate him and his allies. He can talk about apologizing, but will state offer more condolences to the ones who lost their loved ones during the skirmishes of the police in and after the Presidential elections? Will he offer them a trust-fund, something to secure the families of the ones who lost their lives? Will the kids get support for their education and a safety net for the ones who were betrayed by the state in the run-up the fresh presidential elections?
Because, I hate to say it, its easy to apologize, but takes courage to investigate himself with a independent body and also use the coins you self have gotten to help the lives of the ones you hurt. That would have been mature, that would have been righteous. However, I doubt it would happen. Since this government is all about PR and not about delivering service to the community. Peace.
“We have a big workforce in our country and most of them are youthful and looking for jobs. This is why we in NASA are in agreement with Jubilee in matters of job creation, universal healthcare, poverty and food security” – Raila Odinga (01.05.2018).
Today’s speech by the National Super Alliance leader Raila Odinga in Nakuru is unequivocal a sign of loyalty to Jubilee. This is happening now close to two months after the handshake with President Uhuru Kenyatta. What striking today, is his tokens, his resignation of fighting spirit and his direct vision within the government. That meaning, he is practically not an opposition figure, but a stooge inside the Jubilee. Just like the Thirdway Alliance did before the 26th October 2017. Therefore, the is no difference. Only that the words of Odinga matter a bit more than the words of Dr. Ekuru Aukot.
Because today, the National Resistance Movement of Kenya (NRMKe) was dissolved, the whole boycott of government sponsored products and companies, which has been connected to the direct government works. Companies that worked directly during the elections in 2017 and was partly responsible for the rigging and the electoral malpractice, which occurred. So now, its official done. But that has sort-of-died down months ago anyway. It was serious when first unleashed, but a month or two in, the reality wasn’t changing enough. The NASA knew this and their People’s Assemblies has also been dissolved. Before they we’re even built or even became official shadow organizations to the Local Government structures.
Odinga, is really the unofficial Prime Minister, the Republic is a mixed Republic and not a Presidential Republic. However, that is not officially yet, but his actions speaks like it. Especially, with his support of the Big 4 Agenda of Kenyatta. It is like a sign of loyalty to the causes of the Government. That isn’t a sign of an opposition leader. That seal is broken, therefore, Orengo should resign, the ODM shouldn’t be seen as the biggest opposition party, but a direct partner with Jubilee in a coalition. If Odinga supports and works for the agenda of Kenyatta, he is practically part of the Kenyatta paradigm. Even if he says otherwise. He still is, the words and actions shows it.
Odinga is practically the third on the food-chain. The third force in the Jubilee government, if he speaks like this. Odinga should be sworn-in again and get an official title. You can fool people once, maybe twice, but sorry brother, not the third time. Maybe Aukot should start the Fourthway Alliance to get some relevance, because the Third Way right now is Odinga. After Kenyatta and Ruto.
Its time to stop nonsense from this man, the time of opposition is over. Someone else is the real opposition. Someone else is fighting the indifference, the lack of governance and the deteriorating levels of poverty, that so many are feeling day-to-day. Therefore, they were willing to fight and join Odinga during 2017, because his message was different then of Jubilee. Now he sounds and acts like them. Its a betrayal of Canaan, but was already sealed with the handshake in March 2018.
So Kenyatta, do your thing, give the man his office and portifolio. He is your man now. Odinga will not fight you, he is tired and hungry. It is time you feed him and patch his hurt. Let him become PM again, because that is all he wants. Peace.