East Africa: Three EAC States to pay Sh. 35 trillion in debt servicing

East Africa: Three EAC States to pay Sh. 35 trillion in debt servicing

Wacha1

Wacha1

JF-Expert Member
Joined
Dec 21, 2009
Posts
16,681
Reaction score
8,241
Credit: The Citizen Three EAC states to pay Sh35 trillion in debt servicing

Dar es Salaam - When Tanzania dodged the allure of acquiring more debt to cushion the economy from adverse impacts of Covid-19, it may have realised how costly it had become for member states of the East African Community (EAC) to service their debts. An analysis has shown that the three largest EAC economies would have to spend up to Sh35 trillion in debt servicing in the 2020/21 financial year starting on July 1

Top on the list is Kenya. The country, which has been on a borrowing spree in the past few years, will have to spend a staggering Ksh904.7 billion (about Sh19 trillion) in the new financial year on public debt servicing.

With a debt servicing budget of Sh10.4 trillion, Tanzania will spend just close to half of what Kenya will spend. During the 2019/20 financial year, Uganda spent Ush10.32 trillion (about Sh6 trillion) on debt servicing.

The amount that Kenya, Tanzania and Uganda would have to pay in debt servicing is almost the same as Tanzania's entire budget for 2020/21: Sh34.88 trillion. It is also Sh12.7 trillion more than Uganda's total 2020/21 budget of Ush37.792 trillion (about Tsh22.29728 trillion)

By the end of this month, Kenya's total public debt is expected to close the financial year at Ksh6.4 trillion (about Tsh134 trillion). As a percentage of Gross Domestic Product (GDP), Kenya's debt currently stands at 55 per cent of its GDP. Tanzania's Finance and Planning Minister Phillip Mpango told Parliament last week that, as of April, 2020, the total national debt stood at Sh55.43 trillion. This is less than half of Kenya's total debt.

Uganda's total debt stood at $13.3 billion (about Tsh30 trillion) as of December 2019, while Rwanda's total debt was estimated at $4.9 billion by the end of 2018, representing 53.6 per cent of its GDP, according to the ministry of Finance.

The four countries - along with Burundi and South Sudan - have accumulated about $110 billion in loans.

Borrowing for Covid-19

While Tanzania avoided contracting more debts to fight the Covid-19 pandemic, Kenya, Uganda and Rwanda embarked on a borrowing spree over the past two months, adding about $2.3 billion new loans in two months.

Kenya borrowed about $1.5 billion while Uganda and Rwanda borrowed $540.2 million $223.65 million respectively.

In his address from his Chato hometown in April this year, President Magufuli called for debt relief, saying Tanzania currently spends about Sh700 billion each month on debt repayment. "Out of that sum, between Sh200 billion and Sh330 billion goes to the World Bank alone... Since the World Bank has shown its concern and willingness to help us out of this pandemic, allow me to request that the help should come in the form of a relief in repayment of existing debts or at least the interest," President Magufuli said in April.

Last week, the IMF approved $14.3 million in debt relief for Tanzania, under the Catastrophe Containment and Relief Trust, to help the country in its fight against Covid-19.

Sustainable

The IMF has repeatedly said that, despite some spikes, Uganda and Rwanda remain at low risk of debt distress.

Dr Mpango told Parliament last week that a Debt Sustainability Analysis (DSA) conducted in December 2019 confirmed that Tanzania's debt was sustainable in the short, medium and long terms. The minister based his argument on five key parameters which experts use to measure the sustainability of a debt. The parameters include: the ratio of total public debt to GDP; the value of external public debt to GDP; the value of external public debt to exports; the value of external public debt to exports; ratio of external debt servicing to domestic revenue and value of external debt service to exports.

"In the analysis, solvency indicators showed that the ratio of present value of total public debt to GDP was 27.1 percent compared to the recommended threshold of 70 percent; present value of external public debt to GDP was 16.3 percent compared to a threshold of 55 percent; and present value of external public debt to exports was 103.9 percent compared to a threshold of 240 percent," said Dr Mpango

On liquidity indicators, he said the DSA results showed that the ratio of external debt servicing to domestic revenue was 11.9 percent compared to a threshold of 23 percent, while the value of external debt service to exports was 11.9 percent compared to the set threshold of 21 percent''

There will be some people who will not accept that Tanzania spends approximately $300,000 a month paying WB & IMF alone.
 
Wacha1 said:
Credit: The Citizen Three EAC states to pay Sh35 trillion in debt servicing

Dar es Salaam - When Tanzania dodged the allure of acquiring more debt to cushion the economy from adverse impacts of Covid-19, it may have realised how costly it had become for member states of the East African Community (EAC) to service their debts. An analysis has shown that the three largest EAC economies would have to spend up to Sh35 trillion in debt servicing in the 2020/21 financial year starting on July 1

Top on the list is Kenya. The country, which has been on a borrowing spree in the past few years, will have to spend a staggering Ksh904.7 billion (about Sh19 trillion) in the new financial year on public debt servicing.

With a debt servicing budget of Sh10.4 trillion, Tanzania will spend just close to half of what Kenya will spend. During the 2019/20 financial year, Uganda spent Ush10.32 trillion (about Sh6 trillion) on debt servicing.

The amount that Kenya, Tanzania and Uganda would have to pay in debt servicing is almost the same as Tanzania's entire budget for 2020/21: Sh34.88 trillion. It is also Sh12.7 trillion more than Uganda's total 2020/21 budget of Ush37.792 trillion (about Tsh22.29728 trillion)

By the end of this month, Kenya's total public debt is expected to close the financial year at Ksh6.4 trillion (about Tsh134 trillion). As a percentage of Gross Domestic Product (GDP), Kenya's debt currently stands at 55 per cent of its GDP. Tanzania's Finance and Planning Minister Phillip Mpango told Parliament last week that, as of April, 2020, the total national debt stood at Sh55.43 trillion. This is less than half of Kenya's total debt.

Uganda's total debt stood at $13.3 billion (about Tsh30 trillion) as of December 2019, while Rwanda's total debt was estimated at $4.9 billion by the end of 2018, representing 53.6 per cent of its GDP, according to the ministry of Finance.

The four countries - along with Burundi and South Sudan - have accumulated about $110 billion in loans.

Borrowing for Covid-19

While Tanzania avoided contracting more debts to fight the Covid-19 pandemic, Kenya, Uganda and Rwanda embarked on a borrowing spree over the past two months, adding about $2.3 billion new loans in two months.

Kenya borrowed about $1.5 billion while Uganda and Rwanda borrowed $540.2 million $223.65 million respectively.

In his address from his Chato hometown in April this year, President Magufuli called for debt relief, saying Tanzania currently spends about Sh700 billion each month on debt repayment. "Out of that sum, between Sh200 billion and Sh330 billion goes to the World Bank alone... Since the World Bank has shown its concern and willingness to help us out of this pandemic, allow me to request that the help should come in the form of a relief in repayment of existing debts or at least the interest," President Magufuli said in April.

Last week, the IMF approved $14.3 million in debt relief for Tanzania, under the Catastrophe Containment and Relief Trust, to help the country in its fight against Covid-19.

Sustainable

The IMF has repeatedly said that, despite some spikes, Uganda and Rwanda remain at low risk of debt distress.

Dr Mpango told Parliament last week that a Debt Sustainability Analysis (DSA) conducted in December 2019 confirmed that Tanzania's debt was sustainable in the short, medium and long terms. The minister based his argument on five key parameters which experts use to measure the sustainability of a debt. The parameters include: the ratio of total public debt to GDP; the value of external public debt to GDP; the value of external public debt to exports; the value of external public debt to exports; ratio of external debt servicing to domestic revenue and value of external debt service to exports.

"In the analysis, solvency indicators showed that the ratio of present value of total public debt to GDP was 27.1 percent compared to the recommended threshold of 70 percent; present value of external public debt to GDP was 16.3 percent compared to a threshold of 55 percent; and present value of external public debt to exports was 103.9 percent compared to a threshold of 240 percent," said Dr Mpango

On liquidity indicators, he said the DSA results showed that the ratio of external debt servicing to domestic revenue was 11.9 percent compared to a threshold of 23 percent, while the value of external debt service to exports was 11.9 percent compared to the set threshold of 21 percent''

There will be some people who will not accept that Tanzania spends approximately $300,000 a month paying WB & IMF alone.
Click to expand...
"There will be some people who will not accept that Tanzania spends approximately $300,000 a month paying WB & IMF alone" this figure mentioned above is questionable. Some Tanzanian loan request denied due to some reasons.....
 
Kilatha said:
Tanzania inatumia zaidi $300,000,000 kwa mwezi kulipa madeni sio laki tatu.
Click to expand...

Mkuu tuwekee figure ambayo Tanzania inalipa kila mwezi kwa IMF na WB?
 
Wacha1 said:
Mkuu tuwekee figure ambayo Tanzania inalipa kila mwezi kwa IMF na WB?
Click to expand...
Kwenye hiyo habari yako we mwenyewe umeelezewa gharama ya kulipa deni ni tsh 700 billion kwa mwezi.

Sasa billioni 700 ya kitanzania ni karibu na dollar laki tatu au dollar millioni miatatu?
 
Wacha1 said:
Credit: The Citizen Three EAC states to pay Sh35 trillion in debt servicing

Dar es Salaam - When Tanzania dodged the allure of acquiring more debt to cushion the economy from adverse impacts of Covid-19, it may have realised how costly it had become for member states of the East African Community (EAC) to service their debts. An analysis has shown that the three largest EAC economies would have to spend up to Sh35 trillion in debt servicing in the 2020/21 financial year starting on July 1

Top on the list is Kenya. The country, which has been on a borrowing spree in the past few years, will have to spend a staggering Ksh904.7 billion (about Sh19 trillion) in the new financial year on public debt servicing.

With a debt servicing budget of Sh10.4 trillion, Tanzania will spend just close to half of what Kenya will spend. During the 2019/20 financial year, Uganda spent Ush10.32 trillion (about Sh6 trillion) on debt servicing.

The amount that Kenya, Tanzania and Uganda would have to pay in debt servicing is almost the same as Tanzania's entire budget for 2020/21: Sh34.88 trillion. It is also Sh12.7 trillion more than Uganda's total 2020/21 budget of Ush37.792 trillion (about Tsh22.29728 trillion)

By the end of this month, Kenya's total public debt is expected to close the financial year at Ksh6.4 trillion (about Tsh134 trillion). As a percentage of Gross Domestic Product (GDP), Kenya's debt currently stands at 55 per cent of its GDP. Tanzania's Finance and Planning Minister Phillip Mpango told Parliament last week that, as of April, 2020, the total national debt stood at Sh55.43 trillion. This is less than half of Kenya's total debt.

Uganda's total debt stood at $13.3 billion (about Tsh30 trillion) as of December 2019, while Rwanda's total debt was estimated at $4.9 billion by the end of 2018, representing 53.6 per cent of its GDP, according to the ministry of Finance.

The four countries - along with Burundi and South Sudan - have accumulated about $110 billion in loans.

Borrowing for Covid-19

While Tanzania avoided contracting more debts to fight the Covid-19 pandemic, Kenya, Uganda and Rwanda embarked on a borrowing spree over the past two months, adding about $2.3 billion new loans in two months.

Kenya borrowed about $1.5 billion while Uganda and Rwanda borrowed $540.2 million $223.65 million respectively.

In his address from his Chato hometown in April this year, President Magufuli called for debt relief, saying Tanzania currently spends about Sh700 billion each month on debt repayment. "Out of that sum, between Sh200 billion and Sh330 billion goes to the World Bank alone... Since the World Bank has shown its concern and willingness to help us out of this pandemic, allow me to request that the help should come in the form of a relief in repayment of existing debts or at least the interest," President Magufuli said in April.

Last week, the IMF approved $14.3 million in debt relief for Tanzania, under the Catastrophe Containment and Relief Trust, to help the country in its fight against Covid-19.

Sustainable

The IMF has repeatedly said that, despite some spikes, Uganda and Rwanda remain at low risk of debt distress.

Dr Mpango told Parliament last week that a Debt Sustainability Analysis (DSA) conducted in December 2019 confirmed that Tanzania's debt was sustainable in the short, medium and long terms. The minister based his argument on five key parameters which experts use to measure the sustainability of a debt. The parameters include: the ratio of total public debt to GDP; the value of external public debt to GDP; the value of external public debt to exports; the value of external public debt to exports; ratio of external debt servicing to domestic revenue and value of external debt service to exports.

"In the analysis, solvency indicators showed that the ratio of present value of total public debt to GDP was 27.1 percent compared to the recommended threshold of 70 percent; present value of external public debt to GDP was 16.3 percent compared to a threshold of 55 percent; and present value of external public debt to exports was 103.9 percent compared to a threshold of 240 percent," said Dr Mpango

On liquidity indicators, he said the DSA results showed that the ratio of external debt servicing to domestic revenue was 11.9 percent compared to a threshold of 23 percent, while the value of external debt service to exports was 11.9 percent compared to the set threshold of 21 percent''

There will be some people who will not accept that Tanzania spends approximately $300,000 a month paying WB & IMF alone.
Click to expand...
For an article such as this one, it would have been much helpful presenting numbers in one currency, such as the US $, throughout rather than somersaulting from one country's currency to the other.

And to show how bogus these numbers are; take the case of Kenya's debt of Ksh 6.4 Trillion being equal to 55 percent of that country's GDP.

That translates to a GDP of $116.36 Billion!
 
Kula kula tu kila siku na kukinga bakuri la matonya kifua mbele kwamba tunakopesheka toka huko wa mabeberu halafu mnawakandya na kujisemezea " sisi ni matajiri, tutembee kifua mbele". Sasa sote wananchi cha moto tutakiona baada ya uchaguzi 2020. Hebu na tuone ho utajiri wa kukaa miezo sita bila kutegenea misaada ya mabeberu....
 
Kilatha said:
Tanzania inatumia zaidi $300,000,000 kwa mwezi kulipa madeni sio laki tatu.
Click to expand...
That translates to approximatelly $3.6 Billion per year for debt repayment alone.

How much goes for development expenditure?

Moreover, you'll have to combine exports values of what, cashew nuts, tobacco, cotton..., and what else, still you won't be able to meet debt obligations per year!
 
Kalamu1 said:
That translates to approximatelly $3.6 Billion per year for debt repayment alone.

How much goes for development expenditure?

Moreover, you'll have to combine exports values of what, cashew nuts, tobacco, cotton..., and what else, still you won't be able to meet debt obligations per year!
Click to expand...
Wanalipa kutokana na makusanyo yao ya mwezi.

Nchi zetu za kiafrica ni kama mteja (chasing the dragon) tunakopa kutengeneza budget, tuna kusanya kodi kulipa madeni; it’s a vicious cycle.

Hila anachofanya Magu leo kujaribu kufungua accessibility ya kila mkoa ndio kitaweza tatua hili tatizo mbeleni nchi kuwa na uchumi. Badala ya kutegemea Dar, Mwanza, Arusha na export commodities tulizoziea.

Leo kuna wakenya wanaweza fata mahindi Rukwa na Ruvuma kisa kuna accessibility ya barabara na wazambia wanaweza fuata Pamba kanda ya ziwa.

Baadae multiplier effects yake wakulima wakishakuwa na hela wawekezaji wataenda tu kuwapekea bidhaa za viwandani na huduma hatua zitakazopekea kuinua sector zingine za uchumi, kukua kwa uchumi kunapelekea kuongezeka kwa mapato ya serikari, kujitegemea ki budget, kupunguza kukopa au kumudu madeni kirahisi etc.

Magu is doing wonders watu wengi watakuja kuelewa baada ya miaka kwamba kumbe huyu mtu anatengeneza mazingira ya watanzania wa baadae hili nchi ijitegemee.
 
Kilatha said:
Leo kuna wakenya wanaweza fata mahindi Rukwa na Ruvuma kisa accessibility na wazambia wanaweza fuata Pamba kanda ya ziwa. Sasa multiplier effects yake wakulima wakishakuwa na hela wawekezaji wataenda tu na kuinua sector zingine za uchumi, kukua kwa uchumi kunapelekea kuongezeka kwa mapato ya serikari, kujitegemea ki budget, kupunguza kukopa au kumudu madeni kirahisi etc.

Magu is doing wonders watu wengi watakuja kuelewa baada ya miaka kwamba kumbe huyu mtu anatengeneza mazingira ya watanzania wa baadae.
Click to expand...
Ngoja nikiri kwamba huenda bado sijaelewa ulichoandika hapa, lakini kwa haraka haraka naweza kuchambua kivingine kabisa tofauti na ulivyofanya kama nimekuelewa nilivyokuelewa kwa sasa; hasa kwa hao wakenya kwenda kununua mazao shambani kwa wakulima!
Sidhani kuwa hili ndilo analoliruhusu Magufuli, na kama ndilo, basi nitamshangaa sana!
 
Kalamu1 said:
Ngoja nikiri kwamba huenda bado sijaelewa ulichoandika hapa, lakini kwa haraka haraka naweza kuchambua kivingine kabisa tofauti na ulivyofanya kama nimekuelewa nilivyokuelewa kwa sasa; hasa kwa hao wakenya kwenda kununua mazao shambani kwa wakulima!
Sidhani kuwa hili ndilo analoliruhusu Magufuli, na kama ndilo, basi nitamshangaa sana!
Click to expand...
Majuzi tu ukumsikia Kenyatta anataka mahindi ya kusini mwa Tanzania.

Miaka michache nyuma safari ya Mwanza Arusha ilikuwa mission, leo watu wanachagua route.

Hivi unadhani wakenya wangekuwa na interest ya kutaka kufuata wenyewe mahindi kusini bila ya miundombinu ya kuwafikisha huko?

Sasa ukijua faida ya mkulima kupata access ya masoko na athari ya kukosa masoko ndio utaelewa hizi investment za Magu zinafaida gani baadae.
 
S.M.P2503 said:
Kula kula tu kila siku na kukinga bakuri la matonya kifua mbele kwamba tunakopesheka toka huko wa mabeberu halafu mnawakandya na kujisemezea " sisi ni matajiri, tutembee kifua mbele". Sasa sote wananchi cha moto tutakiona baada ya uchaguzi 2020. Hebu na tuone ho utajiri wa kukaa miezo sita bila kutegenea misaada ya mabeberu....
Click to expand...
Ki uhalisia tunakopa pesa ambazo ni zetu tulizoibiwaga kitambo
 
Nchi itajitegemeaje wakati ina vipaumbele visivyo sahihi.

Fedha ambazo zingetumika katika kuboresha kilimo na kukifanya kiwe cha kisasa zinatumika kununulia ndege ambazo faida yake hamna na wala huwezi ukailinganisha na kilimo.

Kwa mfano, kama hii mikopo ingeelekezwa kwenye kilimo, hicho hicho kilimo kingeweza kulipia hiyo mikopo tena vizuri sana lkn kwa hii ya kununua sijui ndege, hamna kitu.

Cha kusikitisha sasa ni kuwa njia pekee ambayo serekali inatumia kulipa haya madeni ni kutoza watu kodi kubwa kubwa wakati yangeweza kulipwa kutokana na mapato yatokanayo na mauzo ya mazao nje ya nchi kama tungekuwa na kilimo cha kisasa.
 
Cha kusikitisha ni kwamba hicho kilimo kimetiliwa mkazo maisha yote na hakijabadilisha maisha ya mtanzania....p
Nyanjomigire said:
Nchi itajitegemeaje wakati ina vipaumbele visivyo sahihi.

Fedha ambazo zingetumika katika kuboresha kilimo na kukifanya kiwe cha kisasa zinatumika kununulia ndege ambazo faida yake hamna na wala huwezi ukailinganisha na kilimo.

Kwa mfano, kama hii mikopo ingeelekezwa kwenye kilimo, hicho hicho kilimo kingeweza kulipia hiyo mikopo tena vizuri sana lkn kwa hii ya kununua sijui ndege, hamna kitu.

Cha kusikitisha sasa ni kuwa njia pekee ambayo serekali inatumia kulipa haya madeni ni kutoza watu kodi kubwa kubwa wakati yangeweza kulipwa kutokana na mapato yatokanayo na mauzo ya mazao nje ya nchi kama tungekuwa na kilimo cha kisasa.
Click to expand...
 
paul sylvester said:
Ki uhalisia tunakopa pesa ambazo ni zetu tulizoibiwaga kitambo
Click to expand...

sio tu kukopa... tuna mpango gani wa kumaliza Kuyalipa madeni yote tunayo daiwa?
Ili tuwe self sufficiency, ni lazima tulipe madeni yote ya Ndani na nje ya nchi na tuachane kabisa na hizi Habari za kukopesheka na kutembea vifua mbele...
Mwisho tuwe na vyanzo vya mapato ambavyo kazi yake itakuwa ni kuyamaliza madeni yote...na Baada ya hapo na sisi tuanze kukopesha nchi Nyingine
 
Kilatha said:
Majuzi tu ukumsikia Kenyatta anataka mahindi ya kusini mwa Tanzania.

Miaka michache nyuma safari ya Mwanza Arusha ilikuwa mission, leo watu wanachagua route.

Hivi unadhani wakenya wangekuwa na interest ya kutaka kufuata wenyewe mahindi kusini bila ya miundombinu ya kuwafikisha huko?

Sasa ukijua faida ya mkulima kupata access ya masoko na athari ya kukosa masoko ndio utaelewa hizi investment za Magu zinafaida gani baadae.
Click to expand...
Lakini jikumbushe pia, hivi hiyo miundo mbinu kweli ni Magufuli ndiye kaianza kiasi kwamba ndiye apewe sifa ya kufanya hivyo?

Safari za kupitia Kenya na kwingineko, zilikoma Magufuli alipoingia madarakani na kutekeleza hiyo mipango?

Na je, ni kweli tunajenga miundombinu hii ili watu toka huko nje wafike huko vijijini kulangua mazao ya wakulima wetu? Ndiyo sababu kuu?

Simwondolei Magufuli nafasi yake katika utekelezaji wa mipango ya utekelezaji wa miundombinu ya nchi yetu, lakini yeye ni sehemu tu ya utekelezaji huo. Kwa bahati nzuri kausimamia na kuuendeleza vizuri; hakuna ninachomwondolea hapo, lakini ni kupotosha kudai kwamba ni yeye ndiye mwanzilishi wa mipango hiyo.
 
MK254 mje huku muone li nchi lenu linavyotafunwa, siku moja Tz itawanunua na kuigeuza Kenya kuwa makumbusho
 
You must log in or register to reply here.

Our Community

Regional Communities

Back
Top Bottom
Menu
Forums
New posts
Log in
Register