Not in the Kenyan business environment/context.

The government is likely to upwardly revise its domestic borrowing for the current fiscal year after surpassing its target in the first quarter amid a shortfall in revenue collection, analysts say.

The Treasury has a net domestic borrowing target of Sh306.8 billion for the year, coupled with internal debt redemptions (roll-overs) of Sh122.6 billion.

Analysts at investment bank Sterling Capital said in their November fixed-income report that an increase in the target—which has already been pushed up by Sh6.5 billion— would be aimed at countering the expected shortfall in revenues for the fiscal year or looking to take advantage of the prevailing low interest rate environment.

In a statement at the end of September on exchequer issues and receipts, the Treasury said it had borrowed a third of its total target in the first three months of the fiscal year.

“Sh144.1 billion was raised from the domestic debt market in the period under focus equivalent to 33.6 percent of the total target (above the 25 percent linear run rate). This supports our view of a high chance of a revision of this receipt target,” said the Sterling Capital analysts.
At the same time, tax revenue performance lagged the quarterly expectations by the end of September at Sh372.3 billion, equivalent to 20.6 percent of the full year target of Sh1.807 trillion.

https://www.businessdail...352290-a6bfpv/index.html

Was this one posted here?

https://www.businessdail...349676-80dlxx/index.html

Treasury mandarins who burned economy with cooked figures.

Be glad that Henry Rotich and Kamau Thugge left treasury.

Word on the ground is State House has ordered parastatals to hand over all their cash reserves, treasury bills/bonds and even A-in-A revenue (i.e what they earn in service fees) to the Treasury.

Who is JJ and how does handing in T/bills&T/bonds help Gava with liquidity?

‘I Don’t Understand Why Kenyans Are Broke’: Mr. Kenyatta’s Debt Distress Revisited 10 min read. Many Kenyans have been wondering why we are told that the economy is growing at a brisk 5 to 6 per cent year after year, yet they are not feeling it. Instead, big companies are issuing profit warnings and laying off people. Kenya’s public debt has increased threefold over the last six years, from Sh1.8 trillion to Sh6 trillion and although the data shows that the economy is growing, the tax base is not expanding and revenue is falling short as debt service charges are rising.

Read more at: https://www.theelephant....ebt-distress-revisited/
The Elephant - Speaking truth to power.

https://www.theelephant....debt-distress-revisited/

How State House Order For Parastatals To Surrender Money To Treasury Will Cripple Economy – David Ndii
In August this year, State corporations were ordered to surrender cash balances in their bank accounts to the treasury.

The order was meant to reduce government’s cost of borrowing which has ballooned in the last six years during the reign of President Uhuru Kenyatta.

However, most of the money could have been used to pay loans which matured between July and October, with the Treasury indicating that it used at least Ksh276.17 billion to repay maturing loans, a 41.55 percent jump from Ksh195.11 billion in the previous four months.
Debt repayments were the second single largest government spend after recurrent expenses such as salaries, allowances and administrative expenses which gobbled up nearly Ksh306.53 billion.

According to economist David Ndii, the act of government drawing monies from parastatals could adversely affect the economy, and service delivery.

“While the memo suggests that some of this money will settle pending bills, far from solving the problem, it has now transferred it to parastatals whose suppliers will now be at the mercy of the exchequer. Expect some parastatals to default on their suppliers in coming days,” says Ndii.

If the money goes to pay foreign debts, Ndii predicts that there will be little circulation of money in the country, which is important for the growth of any economy.
“Because the key driver of the government’s financial crisis is foreign debt, part of the money confiscated from parastatals is going to pay the foreign debt. Instead of circulating in the economy it is going to China. Another body blow to an already battered economy,” he adds.

Treasury bills (T-bills) maturities between July and September stood at Ksh346.9 billion, with another Ksh222.5 billion due for payment between October and December.

“The confiscation of t-bills/bonds is for all intents of purposes, a default action. It does not matter that these are state corporations, these debt instruments backed by law, and the government/debtor has suspended law. It’s a case of might is right, impunity,” says Ndii.
“When it gets more desperate as it will, what will stop it doing the same to other vulnerable investors eg. public pension funds? By resorting to such a draconian action, it has exposed that its more distressed than its been letting on. Expect investors to take note.”
Kenya’s public debt surged closer to Ksh6 trillion at the end of June after Treasury borrowed an additional Ksh770 billion in 12 months.

Normally, the Treasury banks with the Central Bank of Kenya (CBK) hence the move will see large chunks of money withdrawn from the commercial banks.

3 options, based on risk appetite:

Guaranteed safety: Buy gold.
Safety without liquidity: Buy land
Liquidity with risk: Buy bitcoin

CBK, Treasury renew fight over dividend https://www.businessdail...5062-126mfhc/index.html via @BD_Africa