What is jimnah smoking?

I need me some of what jimnah mbaru is smoking... Did he write this article or was it ghost-written for him?

It started off well but as the effects of whatever the writer was chewing or smoking got hold of him...

GoK - Government of Kenya
CBR - Central Bank Rate. Rate at which the CBK lends KES to Kenyan banks.
CR - Cash Ratio. % of customer/bank deposits that have to given (interest-free) by banks to the CBK. It also acts as a brake on lending but increases lending rates.

1) Lower Interest Rates & Cash Ratio:
I agree a lower CR will increase lending as banks will have "more" funds to lend as they can go after additional deposits. As interest rates for loans fall, firms can take on additional risk/investments due to lower project costs.

Lowering the CBR will encourage 'cheaper' lending but this is dicey in that banks often have to be 'forced' (after adjusting for default & borrower risk) to lend at cheaper rates unless there is sufficient competition.

In my view, its better to privatize - or transfer the management to professional hands - additional government owned/controlled institutions e.g. KPA, KPC and KAA then lend them 'cheaper' funds - with private sector oversight - for big-ticket items. This is a long-term view but worked well for the USA during FDR's time with the New Deal...

KPA - A 2nd port + better facilities at Kilindini + new bulk grain handling facility.
KPC - Longer & larger fuel pipelines to Kisumu then Uganda & all the way to Rwanda.
KAA - A 2nd runway is desperately needed + new terminals + FAA Category 1 certification for N.American flights + upgrade existing terminals.

2) Buy SafCon (& other shares) from the market to inject liquidity:
The Hong Kong government did that successfully but HK ran a surplus (GoK has a deficit) & HK's gov't financial dealings are considered relatively 'clean' whereas 'GoK' & 'clean' are not in the same dictionary let alone sentence!

Unless the buying process is managed independent of any political influence, buying shares opens up multiple avenues of insider trading and corruption e.g. merali (a pal of dan moi's) can influence the government to buy shares in his shitty firms (eveready, sasini and sameer) which are among the NSE's worst performers!
Or the GoK buys shares in Tea firms to 'support' the tea industry whereas tourism might be a better investment.

It is short-sighted & stupid to bar Kenyan Fund Managers from investing off-shore. A Fund Manager's job is to get the best returns for his clients NOT support Kenya's economy! What next? Ban forex transactions to 'save' forex? Ban foreign travel to encourage domestic travel?
Just was we want foreign money (FDIs & stock-market investments) we have to allow foreign investments or how different are we from the Tanzanians?

BTW... mbaru was intimately involved in selling SafCon at a preferred price to 'hidden' foreigners who were supposedly 'long-term investors' but these mbaru-supported foreigners were the first to cash out.

3) Borrow to Lend to other countries- Great in theory but not smart in practice... not for Kenya. How will the GoK control - with minimal bureaucracy (read corruption) - that the funds lent are spent on Kenyan goods?
At what interest rate does Kenya borrow & lend?
Will some firms be favoured exporters (esp those connected with politicians)?
How will the minimum 'local' content be regulated so its not just mere trans-shipment of goods?

The only way out is to create an EXIM bank run on a PROFESSIONAL & COMMERCIAL basis which also provides sustainability.

These countries already buy Kenyan, the problem is INFRASTRUCTURAl DEFICIENCIES to deliver the goods. The Rwandese complain about delays in transporting goods. Kenyan exporters have to bribe the Kenyan customs so the trucks are allowed through without inordinate delays. Building a railway to S.Sudan will do more for them & Kenya than lending S.Sudan money. As is... they might just buy more T-72 tanks!

(BTW... who was that idiot wentagula think he was fooling when he said the T-72s were for the Kenyan armed forces?)

Solution is to cut down on spurious customs & inspections when goods are exported to our neighbours. Yes, watch out for smuggled ivory, sandalwood, etc but not the hassles with exporting locally produced goods.

Instead of the GoK borrowing money... how about reducing taxes? Almost the same difference regarding 'deficit' but a much faster way of getting liquidity into the economy... and its also egalitarian!

4) Building Sewers:
Isn't this a job for municipalities?
Why were houses allowed to be built without sewers?

How do cash-strapped consumers build ditches or pay to be connected?
Unlike MPs, the Kenyan taxpayer does not get subsidized housing mortgages or tax-free allowances.
Shouldn't other municipalities be included in the programme?
What happens if a home-owner (with a mortgage) can't afford to be 'connected'?

It's better to have a comprehensive New Deal rather than simply building sewers in Nairobi!

5) Sale Lease-backs:
The chances of buying the properties back at a reasonable price is almost zero... unless the economy is in the gutter... in which case the situation would be similar to what it is now...

And the corruption involved would be phenomenal!

It is more efficient and cheaper to (a) outsource most government functions (b) issue long-dated bonds than sell and lease back properties (c) encourage private entrepreneurship (d) fire 70% of the cabinet.