Tuesday, 30 August 2016

Salvage what you can and run; this gov’t is mortgaging your country

By Shadrack Muyesu
1 Aug.2016: President Kenyatta and his Deputy William Ruto. Their appetite for external debt is unmatched.
“…The country has been borrowing about Sh40 million per hour that adds up to about Sh1 billion every day or Sh30 billion per month… (The Standard)
“Government has been borrowing about Sh355 billion every year, an amount that is enough to construct about 10 Thika superhighways every year… this borrowing that has pushed up Kenya’s outstanding debt by Sh1.065 trillion in the last three years to hit Sh3.4 trillion… (The Standard)
“…Uhuru oversees signing of Sh15 billion loan from China at State House… A Sh4.8 billion grant was for the construction of the Foreign Affairs ministry’s headquarters while a $1 million (Sh102 million) grant was for support in hosting the on-going World Trade Organisation Ministerial Conference” (The star)
 “…Treasury data shows that by March 2015, the Jubilee administration had borrowed Sh874.5 billion between 2013 and 2015, overtaking Kibaki’s regime, which borrowed Sh738 billion in his last term…” (The standard)
“…Sh340.5 billion from external sources. Another Sh229.7 billion will be borrowed from the domestic market… A Sh118 billion loan from China to fund the Standard Gauge Railway (SGR)… At the current borrowing rate, every Kenyan child born next year will have to shoulder a debt of Sh71,000…” (The standard)
“…The International Monetary Fund (IMF) and the World Bank raised the red flag as early as last year on Kenya’s growing appetite for debt…” (The standard)
“…China now owns more than half of Kenya’s external debt…Kenya secured a $600 million loan from china last week to help towards paying for a $6 billion budget deficit that government expects this year…” (Quartz Africa)
“…President Uhuru Kenyatta said on Thursday that the investor had agreed to pump in Sh6 billion over the next three years after purchasing the company’s assets…” (Daily Nation)
 “…Chinese deals signed by the Head of State will raise the country’s external debt position to Sh1.26 trillion up from the Sh843.6 billion as at the year ending June 2013…” (Capital News)
“…China provided $745 million USD loan for the construction of Kenyatta University Teaching, Research and Referral Hospital…” (AidData)
“…Chinese firm’s Sh16 billion deal kicks off Uhuru, Waiyaki Way expansion…”(Business Daily)
February 11th 1963 at the Presidential Palace in Accra. Dr Kwame Nkrumah is done addressing his Cabinet. Just as he is about to put pen to paper to commission yet another of his grand projects, the Minister for Finance stands to speak, his verdict is damning:
“Sir, I am afraid we might not be able to proceed; not now at least when our foreign reserves stand at less than 500,000 pounds…”
Momentarily, an eerie silence engulfs the entire room before it suddenly erupts in animated murmurs, then silence again. Everyone is shocked, yet none as the great man himself. For several minutes, he ponders pensively and then collapses into a teary heap.
Yet how could he? How could Ghana? One time the most promising of tropical states, wasn’t it surprising that hardly six years on, saddled by huge debt, a food shortage that had spiralled out of control and the ever-rising taxes, that Africa’s virgin land now was on the brink of bankruptcy?
Leadership problem
Ghana’s biggest problem had been its leader and, judging from his reaction, he must have known this. A good man to start with, with grand yet genuine ambitions of transforming Ghana into an industrialised state, Nkrumah had recklessly stumbled from one project to another seemingly driven by personal instinct and the grand novelty of an idea rather than its economic viability. He had overlooked the interests of the simple man, the peasant, choosing instead to focus government resources of expensive undertakings such as the mechanising state farms.
Simple necessaries such as elementary schools or even a pharmaceutical plants to heal the burgeoning drug shortage were overlooked at the expense of factories, shipyards and steelworks that he personally sanctioned, not to mention a huge set of concrete silos that were rendered unusable on completion. Actually, they never popped up on his “to do” list but even when they did, he always preferred the option that cost ten times as much.
Anyone with a bribe and a big idea could foster partnership with Nkrumah (Ghana). Then, as yours truly is doing now, some protested but that didn’t deter him for simply, they were “enemies of progress”; neither did a looming cash crisis or anything else for that matter.
Indeed, when domestic coffers ran low, he simply turned to the East for a loan, not caring about the suspect commitments he let Ghana into as collateral (at one time he even lined up a state carrier complete with a fleet of jets to fly to destinations such as Cairo and Moscow for which there was no demand. These planes became the personal taxis of government officials at the expense of the taxpayer).  Ghana become an import state – a problem only worsened by the inefficiency and corruption of the battalion of cronies he had handpicked from his CPP faction to oversee his developments.  Naturally, his projects couldn’t stand and as, one by one, they collapsed, he followed them into the abyss of Ghana’s forgettable histories.
50 years later, in faraway Kenya, it is Uhuru Muigai Kenyatta’s turn – a laptop project against a teacher and classroom shortage; food insecurity against low maize, cane and coffee prices for peasant farmers; food insecurity and lax imports against an embarrassment of a project in the Tana Delta; immaculate highways against a tipping public and external debt balance; national unity in the Jubilee Alliance against a reward mechanism in incompetent tribal appointments, not to mention a National Assembly that has prostituted its oversight role on the altar of quick cash and party politics! Hardly does history repeat itself in such exact margins.
As we cheer on the sand castle he is building, we should remember that, while the Chinese are always at our beck and call with “cheap” yet easily accessible loans, their dictate is often that this money will be spent on Chinese labour and Chinese machinery. Over and above the normal monetary payments, our friends from the East have been known to insist on China-friendly policies and other market concessions as preconditions – even payments for their loans. Simply, China pushes us to take loans she knows we will never be able to pay before it fills our markets with cheap Chinese commodities, which, unless we pay back, we can never have the moral or legal authority to throw out. It is no wonder therefore there is Chinese fish in Kisumu, Chinese mitumba, gadgets, “naturalised” Chinese ajua experts in Nyanza and the rising movement of cons and randy highway constructors that we can never deport.
The truth behind China’s extensive generosity is simple…
…To continue reading this story, please buy a copy of the magazine available in all leading supermarkets and street vendors at only kshs 350

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