Umefanya makosa kibao kwenye post yako. Kwanza ukisema Govt = 100 unamaanisha nini? 100 ksh au Tsh au USD? Halafu unamaanisha 100 nini? 100 thousand au million au billion? Halafu huwezi kucompare figures ambazo umeandika in Tsh na figures ambazo umeandika in Ksh, figures zote lazima ziwe in one currency ndio uweze kuzicompare. Mwisho, hizi figures umezitoa wapi? Unaweza kuwa umezitoa makalioni tu. Tupe source ya hizi figures mzee.The size of the GDP 'dont matter'. Whats more important is a local content if you aim to transform the lives of the locals. I will give you comparative example:
A Tanzanian farming economy
Fertilizer (other inputs) = 200
Farmer's (middle men, transportres) = 800
Govt = 100
Total (Cogas)= 1100
Cogas ~ Cost of goods available for sale.
Kenyan manufacturing economy making sweets
Imports (sugar etc) = Tsh 700
Govt (taxes) = 100
Others (middle men, employees etc) = 200
Govt = 100
Total (Cogas) = 1100
Read again. All figures for comparison are in Tsh.Umefanya makosa kibao kwenye post yako. Kwanza ukisema Govt = 100 unamaanisha nini? 100 ksh au Tsh au USD? Halafu unamaanisha 100 nini? 100 thousand au million au billion? Halafu huwezi kucompare figures ambazo umeandika in Tsh na figures ambazo umeandika in Ksh, figures zote lazima ziwe in one currency ndio uweze kuzicompare. Mwisho, hizi figures umezitoa wapi? Unaweza kuwa umezitoa makalioni tu. Tupe source ya hizi figures mzee.
It will mean nothing to an ordinary Kenyan. Its a way to raise GDP figures to justify more borrowing as more loans are pegged on the GDP figures.Economists, what does this mean?
That Kenya is reviewing the size of the economy later in the year.
Does it mean the GDP will jump to 150 - 200B?
More loans more project?
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Treasury to rebase GDP after new Eurobond tap
Kenya has kicked off its fourth Eurobond offer with a promise to review the size of the economy later in the year through a rebasing similar to the one conducted in 2014.
The expected resultant higher GDP figures will help improve Kenya’s debt-to-GDP ratios and can, therefore, be applied by the country to justify the capacity to carry a larger debt load.
In a preliminary offer document for the issuance of a Eurobond whose roadshows the Treasury kicked off on Tuesday, the government said the rebasing will give an accurate reflection of the structure and size of the Kenyan economy.
Kenya rebased its economy in September 2014, revising the base year to 2009 from 2001 previously, which grew the GDP per capita from $994 to $1,256 and catapulted the country to middle-income status.
Overall, the exercise pushed the size of the economy up by 25.4 percent, putting the GDP figure for 2013 at Sh4.75 trillion from the earlier estimate of Sh3.8 trillion.
According to the latest National Economic Survey from the bureau of statistics, Kenya’s economy was valued at Sh9.7 trillion as at the close of December 2019.
“The rebasing in 2014 allowed the Government to account for changes in the production structure, relative to product prices and products. These measures have led to changes in the size of GDP, growth rates, contributions by sector, and related indicators that use GDP. The next rebasing is expected to take place later in 2021,” the Eurobond document states.
The rebasing in 2014 helped Kenya overtake countries such as Ethiopia, Tunisia, and Ghana and claim position nine in the list of largest economies in Africa from the previous 12th slot. The country also jumped about 10 spots globally from position 87, overtaking nations such as Guatemala, Bulgaria, Costa Rica, and Lebanon.
If the rebasing is done this year, it will be the seventh time Kenya’s economy will be undergoing the exercise, with previous ones in 1957, 1967, 1976, 1985, 2005, and 2014.
“The UN Statistical Commission recommends that countries rebase every five years. Rebasing enables economic estimates to better account for the current structure of the economy and sectoral growth drivers and to better reflect the performance of the most important parts of the economy,” adds the Treasury in the Eurobond document.
The Treasury has picked global financial services firms Citi and JPMorgan as lead underwriters for the Eurobond IV loans, while I&M Bank and NCBA Group will be the local financial managers advising the government on potential issuance.
Rebasing also carries significant implications concerning the type of financing they can access on the global markets.
The 2014 rebasing lifted the country to lower middle-income economic status and effectively locked it out from accessing most concessional financing available to low-income economic countries.
Syndicated loans
It, however, gave it access to more commercial funding that saw Kenya accumulate Eurobonds and syndicated loans which accounted for about 26 percent of external public debt at the end of 2020.
Eurobonds account for 70 percent of Kenya’s commercial debt ($6.1 billion), while syndicated loans represent 27 percent (about $2.5 billion).
The borrowing has pushed total Kenyan debt to Sh7.4 trillion which is 69 percent of the GDP from 48.6 percent in 2015, making it unsustainable.
Kenya plans to borrow an additional Sh929 billion in the next fiscal year and may benefit from the optics of a larger economy by bringing down the debt ratios.
Even though the move is seen as a way of increasing the economy’s capacity to carry more debt, the Treasury says the exercise will help provide more clarity about balance of payment data used to evaluate the value of the currency, imports, and exports which have returned errors over the past few years.
“There have also been significant efforts to improve the compilation of Kenya’s balance of payments data in recent years, including through technical assistance provided by the IMF. However, errors and omissions in the balance of payments data persist and may complicate the assessment of such data”, the document says.
Kenya initially borrowed on set ceilings until 2014 when the Jubilee administration changed to borrowing as a proportion of the GDP.
In 2014, the government was forced to approach Parliament to increase the external borrowing ceiling by Sh1.3 trillion to Sh2.5 trillion and pushed up the total debt to Sh2.4 trillion.
They would have had to do every year, but the new government enacted the Public Finance Management Act of 2015, giving parliamentary oversight role over the budget while the Treasury drove the revenue-raising agenda.
Source: Business Daily
Tutegemee mue namba 1 Africa GDP walau muisogeze kwenye $500B ...Baada ya hii, itakua rasmi uchumi wetu utazidi wa Tanzana mara mbili, ndio tunawapa mkono wa buriani....
huku njaa,umasikini,ukosefu wa vyoo ukiendelea kuwanata.
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Tutegemee mue namba 1 Africa GDP walau muisogeze kwenye $500B ...
Muendelee kuchukua mikopo ya kujenga expressways kila kona na kuisumbua Tz...
Sisi tunaenda na uhalisia!
You rebased your economy a few years back. Did you also do it to get more room for loans. Unaumwa sana na masuala ya Kenya wakati yenu imewashinda licha ya rasilimani zote mko nazo!poleni rebase inafanyika kupata nafasi ya kukopa kama debt to GDP ratio imewekwa 90% then uki-rebase ur GDP the upper limit inakuwa technically raised though remains the same at 90% while true debt to GDP ratio gets diluted!
Madini yetu yanawaumiza naona...sema kuna mambo yanatuangusha sanaHuo uhalsia ndio tunakomalia nawo, yaani bila madini ila tunajituma...hamna cha uzembe nchi hii...
Have you forgotten where poverty has its roots, branches and trunks here in EA?huku njaa,umasikini,ukosefu wa vyoo ukiendelea kuwanata.
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Inatuuma kuona jinsi mmelalia masikio huku umasikini ikiwanyonya hadi mifupani licha ya utajiri mliyonayoMadini yetu yanawaumiza naona...sema kuna mambo yanatuangusha sana
According to the UN every country is supposed to rebase its Gdp after every 5 years. Sisi tunafuata ushauri wa UN.
Nigeria did this in 2013. Their economy jumped from 270 billion to 510 billion
Madini yetu yanawaumiza naona...sema kuna mambo yanatuangusha sana
Wivu ni wa nini mzee? Yaani unatuonea wivu kwa sababu tunawapiga lap kwenye Gdp? Ni kama tuko kwenye mashindano ya riadha halafu sisi tunawapiga tunawaovertake mara mbili. Najua Malazy mnahisi uchungu usio na mithili.Tutegemee mue namba 1 Africa GDP walau muisogeze kwenye $500B ...
Muendelee kuchukua mikopo ya kujenga expressways kila kona na kuisumbua Tz...
Sisi tunaenda na uhalisia!
Mambo kama gani yanawaangusha? Hebu taja kadhaa.Madini yetu yanawaumiza naona...sema kuna mambo yanatuangusha sana
The problem with Nigeria is that its statistical figures have been flawed for a long time evidenced by the inconsistent data from their government agencies... in fact, they have not conducted any proper census since 2006, on the other hand, Kenya conducted a comprehensive census in 2019, so our rebasing of the economy will be grounded on facts and solid data.Nigeria did this in 2013. Their economy jumped from 270 billion to 510 billion
Sio lazima uelewe kila kitu. Ambacho hujaelewa wewe, wataelewa wengine.Umefanya makosa kibao kwenye post yako. Kwanza ukisema Govt = 100 unamaanisha nini? 100 ksh au Tsh au USD? Halafu unamaanisha 100 nini? 100 thousand au million au billion? Halafu huwezi kucompare figures ambazo umeandika in Tsh na figures ambazo umeandika in Ksh, figures zote lazima ziwe in one currency ndio uweze kuzicompare. Mwisho, hizi figures umezitoa wapi? Unaweza kuwa umezitoa makalioni tu. Tupe source ya hizi figures mzee.
Of Course Mwananchi on the ground anafaidika. Miradi zilizojengwa au zinazojengwa since 2013 ni kama vileBut does it helping to improve anything on the ground!!?
I mean the citizens welfare!!?
🤔🤔🤔
I cannot make sense of anything you wrote maybe if you expound further utaeleweka . Plus I don't think manufacturing is the biggest contributor to GDP in Kenya.The size of the GDP 'dont matter'. Whats more important is a local content (what the economy is made of) if you aim to transform the lives of the locals. I will give you comparative example:
A Tanzanian agrarian (farming) economy (Paw paw)
Fertilizer (other inputs) = 200
Govt duties and other deductions = 50
Farmer's (middle men, transportres) income = 750
Govt taxes (fees, commission, levies, duties)= 100
Total/ GDP per capita (*Cogas)= 1,100
*Cogas ~ Cost of goods available for sale.
Kenyan manufacturing economy making sweets
Imports (sugar etc) = Tsh 700
Govt duties and other deductions = 100
Others (middle men, employees etc) = 200
Govt (taxes)= 100
Total/ GDP per capita (Cogas) = 1100
So in our hypothetical example you will note, more value is produced by the locals in Tz economy while more values is produced abroad in Kenyan type of ecomomy for each GDP per capita. This leaves majority poorer in Kenyan type of economy even though the GDP figures may look more attractive in comparison to Tz!
So both ecomomies should work to improve local contents in value chains in many goods and services produced if they are to realize desired economic outcomes to their people.