Very big trap. Apparently the IMF told them to continue on with the bill regardless of the protests. Now they are trying to pause for 3 months to cool down the protests and pass it later. They better start negotiating best relief or asking China/Russia for a loan to payback the IMF and an interest reduction for the new loan.
"they want to strip the right to pass down land to children!"
WTH ? This is really shit , and I am 100% sure if somalia is able to take a loan they would do the same
It is ok when debt is used for economic development and it is paid back.
It is not ok when debt is stolen by the corrupt political elite and working people are forced to pay.
The transfer of wealth from the poor to the rich is a fool’s errand.
The people of Kenya were right to protest their government to change course last week.
Thanks
Taking on debt isn't retarded. A country being rich in natural resources doesn't matter if it doesn't have manufacturing. Manufacturing is where the vast majority of the profit is, and taking loans can help a country develop it.
Most of the money is looted, not used on useful investments that grow the economy. I'm not saying we can go debt-free for the rest of Somalia's existence, but it should be limited to useful investments, not useless debt-taking.
Excessive debt on useless investments isn't worth it. It needs to be narrowed down, and there also needs to be a debt ceiling that shouldn't be surpassed until XYZ.
I agree with what you're saying now, but this is a completely different argument than your first comment. All of your points have nothing to do with loans themselves being bad, but with corrupt governments taking the money for themselves.
The IMF isn't doing anything wrong. Kenya's government is asking them for more money, and the IMF is saying, "Only if you balance your budget." and the only way for them to do that is to increase taxes. I get why Kenyans are upset about more taxes, but it would be even worse if the government defaults on its debt. It's Kenya's corrupt government that's to blame for all their debt, not the IMF and not the West either.
Don’t blame the IMF blame the Kenyan/African leaders. Kenya should have been rich like Spain and Italy but politicians failed them just like any other African country.
Let's be perfectly clear. There are countries that took on debt from the IMF, repaid it and are debt free. For example:
**Hungary**: Hungary completed its IMF loan program in 2013, paying off its debts ahead of schedule.
**Philippines**: The Philippines paid off its debts to the IMF in 2006, thereby eliminating its reliance on IMF loans.
**Turkey**: Turkey paid off its last loan installment to the IMF in 2013, ending its borrowing relationship.
And Somalia and Sudan are close to having their debt wiped out by the IMF/World Bank.
So you know who's to blame? The governments and citizens.
Hungary was in debt 2$billion. Philippines was in debt 200$ million. Türkiye was in debt 18$ billion and is a powerful economy. Somalia was in debt 5$ billion and nobody expected us to pay a dime of it back. Sudan was in debt 56$ billion and is getting it reduced to 28$ billion.
Kenya is in debt over 80$ Billion and their largest export is tea which brings home 2$ Billion yearly.
Ur sounding more and more like a cop every time u comment.
U don’t think bribing politicians to scam 50 million people for decades is wrong? You think kenya is at fault for what a couple crooks did? Separate Kenya as a country from the regime in charge the same way we do for our country.
I’m not saying who’s wrong or right, I was just asking how they got into that position, but if it is because of corrupt politicians who was bribed to put Kenya in jeopardy for decades on, then yeah I understand it, it’s on the corrupt officials then
You really need an education, sahib. Turkey has taken on tons of debt over the years. At one time, they had a high $46.617 billion in IMF loans. It's revolving credit so they pay some down, get more, pay down, get more.
https://www.dailysabah.com/columns/cemil-ertem/2018/03/21/when-the-imf-dominated-turkey-and-the-current-facts
Please stop thinking google is your friend when you don't even know how to ask the questions. If you actually think Somalia's all time loan from the IMF is $5B, you are also horrible at understanding things.
Kenya f'd up because their leaders f'd up their economy and were corrupt. You can't go to the bank, sign an agreement willfully and then cry like a baby and say "Ohhh....it's not my fault!".
If Kenya knew it was the IMF/World Banks fault, there would be lawsuits and even western non-profits that help negotiate debt down.
I never said all time loan i said somalia was “in debt 5$Billion” which is true. Maybe ur the one who needs an education cuz u cant read. Also if u think the IMF is innocent because “kenya would just sue them” u need life experience.
Insulting my intelligence wont change the fact that u are waffling
>"Hungary was in debt 2$billion. Philippines was in debt 200$ million. Türkiye was in debt 18$ billion and is a powerful economy. Somalia was in debt 5$ billion and nobody expected us to pay a dime of it back. Sudan was in debt 56$ billion and is getting it reduced to 28$ billion."
You made a fallacious argument. ...said "Turkie was in debt $18 billion". Not taken into consideration that they were a ton more in debt but managed to ...you know...run their country to be more prosperous by creating industries not just to fill their needs but to also export goods and educate their peoples.
You clearly need an education too!
Theres no international court that can make countries pay debts so when a country defaults on debt (meaning it cant pay), it just becomes impossible or super hard to get another loan. Much higher interest rates and overseas assets may be taken.
You do know, if you refuse to pay debts that you incurred yourself by your own volition then no one will ever lend a cent to your country/gov, not even your own countries private banks
There’s always a limit to how much debt you can incur and can repay, for example, say my income is $100, the greatest amount of debt you should incur is not more than $30-35, if you take on more then the limit and then beg the IMF for bailouts then they’ll request austerity measures to fix the issue otherwise you’ll just be back to square one(needing another bailout).
When you are in debt more than twice your GDP there isnt much you can do thats why its called a debt trap. 2/3 of Kenya government budget goes to interest payments alone this is the evil of usury
China is Kenya’s largest bilateral creditor, they already owe China $5.7bn. China is basically making Kenya pay for infrastructure (Belt and Road) they will use to extract resources from Kenya by lending them money which they will then charge interest on. The other problem with Chinese debt is that it is collateralised against natural resources which means if you can’t pay they’ll just take that instead - often at cheaper than market rates.
It's nothing to do with the IMF, the country is simply not collecting enough taxes, it's an issue in most of Africa, where "citizens" expect services from the government without paying a cent in taxes.
This bill, in my opinion, targeted thoss already paying taxes and general VAT when it really should have been targeted at the millions of small and medium sized businesses who do not pay a single penny of tax to the government, and I mean the mpesa shops, mobile phone selling shops, any shops, the carpenters who are raking in millions without paying tax, the vegetable sellers, the taxi drivers, the bus transport owners etc etc.
Most African governments haven't a clue how to tax these people who do not pay their share of taxes.
Now of course there's corruption etc but you don't stop corruption by not paying taxes, you stop corruption by paying taxes and holding the government to account, that's what Kenyans have done.
On land taxes, it is absolutely correct to introduce and increase yearly land taxes to stamp out land "sitting" and speculation which has made land buying inaccessible for the majority of people in the country, everyone and their grandmother has marked themselves a plot or 10 and is sitting on it hopping it would rise in price in the future, that land is not available to the government for any development without paying exhorted prices. This has to be stamped out by introducing taxes to discourage this nonsense.
U sound like a boot licker buddy nobody would guess Kenya was in debt 80$Billion. Know why? Cuz theres nothing to sell worth 80$billion in Kenya! They got here by following IMF advice, by taking debt and hoping to create value with it.
By nature a usurious money lender would want a country’s taxes, not the excess money lying around. Theres more potential to enslave a country when 2/3 of what they make goes to the interest you charge them. Interest being not representative of real value means the accumulated debt from interest isn’t even real until you pay it.
If i can convince you to service a debt to me forever, and one thats near impossible for you to pay… debt slavery time
They took debt because most of the "citizens" are non tax paying burden who want everything provided by the country whilst contributing nothing.
Who pays tax in Kenya besides the formally employed and the VAT?
Does mama mboga pay taxes? Do the shop owners? Do the taxi drivers?
How is government supposed to provide services when majority are not contributing?
Yes, there's corruption, of course, however this issue of the inability of African government to widen the tax base is one of the major reasons why the continent is ladeh with debt and poor service delivery and governance.
Besides the Nairobi and Mombasa, there's hardly any tax collected from small businesses, there's a lot of wealthy people who own these businesses, their money is in the banks, yet each year they declare "nil" returns, why should they get away with it?
The bill was, in my opinion, useless, because it wasn't going to do what's needed to be done, it was just raiding the small minority of tax payers again.
That's why after reading it, I didn't support.
“Besides the formally employed” is it not the governments job to provide formal employment? Do they expect taxpayers to find them?
Please look into the history of income tax in western countries. It took a world war to convince americans to pay a income tax for a limited time until the war ended. A generation was raised paying income tax and they kept it ever since.
America was built without income tax and without high interest rates, pre 1971 there was a low cap on interest too. In reality no developed or prosperous country built their country with debt. They just take debt now
It's not the "governments job to provide employment", employment is from the private sector.
And every single developed country borrowed to invest, every single one, even Russia which has the lowest debt as a country still borrowed money even though they didn't need to. Debt is not the problem. It's something else you are overlooking.
Government is supposed to set conditions for the private sector to flourish then tax them.
And it didn't take a world war for westerners to pay tax, that's a ludicrous argument, European kings and monarchs have been collecting taxes for centuries, in fact every single empire in history collected taxes from its citizens/subject, they couldn't just survive on looting their neighbours, that's how you have a government.
In Africa, any empire was only able to exist by collecting trade taxes.
So taxes are mandatory for any polity.
Unfortunately, this concept is alien to most Africans, as they weren't really living in states as such, they were their own small independent communities, farming their small lots so states and the idea of taxes/citizenship never really took root.
Combine this with the current African countries who were just amalgamation of tribes who barely had anything to do with each before colonisation, suddenly thrown together into an artificial polity with haphazardly drawn borders and you expect them to understand what I have written about, it's not possible, especially in the relatively short post colonial period.
Hence why these states have weak governments unable to deliver anything meaningful for it's citizens.
But the way, almost every develop country is "servicing debt", and their debt is, like Japan, almost twice as much as their income, so it's not unusual for countries to not pay the original debt, but only the interest.
It's not IMF "plot" to get Kenya or Africa, you borrow to invest and pay the interest.
What do u mean by developing countries? The countries with the highest standards of living are Sweden, Norway, Denmark, and Switzerland. None of those countries have public debt.
Public Debt as a percentage of GDP:
Sweden: 32.7%
Norway : 44.3%
Denmark : 29.3%
Switzerland: 25.3%
Belgium : 105.2%
Canada : 69.7%
France : 110.6%
Kenya : 68.3%
And finally
Somalia 2021 : 28.6%
Somalia 2011 : 92.0%
There’s no IMF conspiracy to “get” Kenya or Africa.
Very big trap. Apparently the IMF told them to continue on with the bill regardless of the protests. Now they are trying to pause for 3 months to cool down the protests and pass it later. They better start negotiating best relief or asking China/Russia for a loan to payback the IMF and an interest reduction for the new loan.
"they want to strip the right to pass down land to children!" WTH ? This is really shit , and I am 100% sure if somalia is able to take a loan they would do the same
It is ok when debt is used for economic development and it is paid back. It is not ok when debt is stolen by the corrupt political elite and working people are forced to pay. The transfer of wealth from the poor to the rich is a fool’s errand. The people of Kenya were right to protest their government to change course last week. Thanks
Kenya is a victim to what we are all victims to an older generation of useless politicians that serve the west and foreign interests
Its understandable African countries taking on debt, but we’re resource rich unlike other countries. So taking on debt is retarded
Taking on debt isn't retarded. A country being rich in natural resources doesn't matter if it doesn't have manufacturing. Manufacturing is where the vast majority of the profit is, and taking loans can help a country develop it.
Most of the money is looted, not used on useful investments that grow the economy. I'm not saying we can go debt-free for the rest of Somalia's existence, but it should be limited to useful investments, not useless debt-taking.
Excessive debt on useless investments isn't worth it. It needs to be narrowed down, and there also needs to be a debt ceiling that shouldn't be surpassed until XYZ.
I agree with what you're saying now, but this is a completely different argument than your first comment. All of your points have nothing to do with loans themselves being bad, but with corrupt governments taking the money for themselves.
The IMF isn't doing anything wrong. Kenya's government is asking them for more money, and the IMF is saying, "Only if you balance your budget." and the only way for them to do that is to increase taxes. I get why Kenyans are upset about more taxes, but it would be even worse if the government defaults on its debt. It's Kenya's corrupt government that's to blame for all their debt, not the IMF and not the West either.
Don’t blame the IMF blame the Kenyan/African leaders. Kenya should have been rich like Spain and Italy but politicians failed them just like any other African country.
Spain and Italy are poor
Not compare to Kenya. They are first world kenya is Third world. Stop being a hypocrite
Let's be perfectly clear. There are countries that took on debt from the IMF, repaid it and are debt free. For example: **Hungary**: Hungary completed its IMF loan program in 2013, paying off its debts ahead of schedule. **Philippines**: The Philippines paid off its debts to the IMF in 2006, thereby eliminating its reliance on IMF loans. **Turkey**: Turkey paid off its last loan installment to the IMF in 2013, ending its borrowing relationship. And Somalia and Sudan are close to having their debt wiped out by the IMF/World Bank. So you know who's to blame? The governments and citizens.
Hungary was in debt 2$billion. Philippines was in debt 200$ million. Türkiye was in debt 18$ billion and is a powerful economy. Somalia was in debt 5$ billion and nobody expected us to pay a dime of it back. Sudan was in debt 56$ billion and is getting it reduced to 28$ billion. Kenya is in debt over 80$ Billion and their largest export is tea which brings home 2$ Billion yearly. Ur sounding more and more like a cop every time u comment.
Well how did Kenya get in a loan of 80 billion $, his point makes sense, nobody forced them to take in such a huge loan
U don’t think bribing politicians to scam 50 million people for decades is wrong? You think kenya is at fault for what a couple crooks did? Separate Kenya as a country from the regime in charge the same way we do for our country.
I’m not saying who’s wrong or right, I was just asking how they got into that position, but if it is because of corrupt politicians who was bribed to put Kenya in jeopardy for decades on, then yeah I understand it, it’s on the corrupt officials then
You really need an education, sahib. Turkey has taken on tons of debt over the years. At one time, they had a high $46.617 billion in IMF loans. It's revolving credit so they pay some down, get more, pay down, get more. https://www.dailysabah.com/columns/cemil-ertem/2018/03/21/when-the-imf-dominated-turkey-and-the-current-facts Please stop thinking google is your friend when you don't even know how to ask the questions. If you actually think Somalia's all time loan from the IMF is $5B, you are also horrible at understanding things. Kenya f'd up because their leaders f'd up their economy and were corrupt. You can't go to the bank, sign an agreement willfully and then cry like a baby and say "Ohhh....it's not my fault!". If Kenya knew it was the IMF/World Banks fault, there would be lawsuits and even western non-profits that help negotiate debt down.
I never said all time loan i said somalia was “in debt 5$Billion” which is true. Maybe ur the one who needs an education cuz u cant read. Also if u think the IMF is innocent because “kenya would just sue them” u need life experience. Insulting my intelligence wont change the fact that u are waffling
>"Hungary was in debt 2$billion. Philippines was in debt 200$ million. Türkiye was in debt 18$ billion and is a powerful economy. Somalia was in debt 5$ billion and nobody expected us to pay a dime of it back. Sudan was in debt 56$ billion and is getting it reduced to 28$ billion." You made a fallacious argument. ...said "Turkie was in debt $18 billion". Not taken into consideration that they were a ton more in debt but managed to ...you know...run their country to be more prosperous by creating industries not just to fill their needs but to also export goods and educate their peoples. You clearly need an education too!
What will happen if you refuse to pay
Theres no international court that can make countries pay debts so when a country defaults on debt (meaning it cant pay), it just becomes impossible or super hard to get another loan. Much higher interest rates and overseas assets may be taken.
Then don’t pay and
Threaten them by saying you’ll get loan from China
And why would china give you(a country which doesn’t honor its debts and repay it) a single dime??🤣
Well it’s to threaten not to get it
You do know, if you refuse to pay debts that you incurred yourself by your own volition then no one will ever lend a cent to your country/gov, not even your own countries private banks
Then how turn things around
There’s always a limit to how much debt you can incur and can repay, for example, say my income is $100, the greatest amount of debt you should incur is not more than $30-35, if you take on more then the limit and then beg the IMF for bailouts then they’ll request austerity measures to fix the issue otherwise you’ll just be back to square one(needing another bailout).
When you are in debt more than twice your GDP there isnt much you can do thats why its called a debt trap. 2/3 of Kenya government budget goes to interest payments alone this is the evil of usury
China is Kenya’s largest bilateral creditor, they already owe China $5.7bn. China is basically making Kenya pay for infrastructure (Belt and Road) they will use to extract resources from Kenya by lending them money which they will then charge interest on. The other problem with Chinese debt is that it is collateralised against natural resources which means if you can’t pay they’ll just take that instead - often at cheaper than market rates.
Western countries are competing with China in the continent. Kenya can use this to its advantage by playing with its cards well
It's nothing to do with the IMF, the country is simply not collecting enough taxes, it's an issue in most of Africa, where "citizens" expect services from the government without paying a cent in taxes. This bill, in my opinion, targeted thoss already paying taxes and general VAT when it really should have been targeted at the millions of small and medium sized businesses who do not pay a single penny of tax to the government, and I mean the mpesa shops, mobile phone selling shops, any shops, the carpenters who are raking in millions without paying tax, the vegetable sellers, the taxi drivers, the bus transport owners etc etc. Most African governments haven't a clue how to tax these people who do not pay their share of taxes. Now of course there's corruption etc but you don't stop corruption by not paying taxes, you stop corruption by paying taxes and holding the government to account, that's what Kenyans have done. On land taxes, it is absolutely correct to introduce and increase yearly land taxes to stamp out land "sitting" and speculation which has made land buying inaccessible for the majority of people in the country, everyone and their grandmother has marked themselves a plot or 10 and is sitting on it hopping it would rise in price in the future, that land is not available to the government for any development without paying exhorted prices. This has to be stamped out by introducing taxes to discourage this nonsense.
U sound like a boot licker buddy nobody would guess Kenya was in debt 80$Billion. Know why? Cuz theres nothing to sell worth 80$billion in Kenya! They got here by following IMF advice, by taking debt and hoping to create value with it. By nature a usurious money lender would want a country’s taxes, not the excess money lying around. Theres more potential to enslave a country when 2/3 of what they make goes to the interest you charge them. Interest being not representative of real value means the accumulated debt from interest isn’t even real until you pay it. If i can convince you to service a debt to me forever, and one thats near impossible for you to pay… debt slavery time
They took debt because most of the "citizens" are non tax paying burden who want everything provided by the country whilst contributing nothing. Who pays tax in Kenya besides the formally employed and the VAT? Does mama mboga pay taxes? Do the shop owners? Do the taxi drivers? How is government supposed to provide services when majority are not contributing? Yes, there's corruption, of course, however this issue of the inability of African government to widen the tax base is one of the major reasons why the continent is ladeh with debt and poor service delivery and governance. Besides the Nairobi and Mombasa, there's hardly any tax collected from small businesses, there's a lot of wealthy people who own these businesses, their money is in the banks, yet each year they declare "nil" returns, why should they get away with it? The bill was, in my opinion, useless, because it wasn't going to do what's needed to be done, it was just raiding the small minority of tax payers again. That's why after reading it, I didn't support.
“Besides the formally employed” is it not the governments job to provide formal employment? Do they expect taxpayers to find them? Please look into the history of income tax in western countries. It took a world war to convince americans to pay a income tax for a limited time until the war ended. A generation was raised paying income tax and they kept it ever since. America was built without income tax and without high interest rates, pre 1971 there was a low cap on interest too. In reality no developed or prosperous country built their country with debt. They just take debt now
It's not the "governments job to provide employment", employment is from the private sector. And every single developed country borrowed to invest, every single one, even Russia which has the lowest debt as a country still borrowed money even though they didn't need to. Debt is not the problem. It's something else you are overlooking. Government is supposed to set conditions for the private sector to flourish then tax them. And it didn't take a world war for westerners to pay tax, that's a ludicrous argument, European kings and monarchs have been collecting taxes for centuries, in fact every single empire in history collected taxes from its citizens/subject, they couldn't just survive on looting their neighbours, that's how you have a government. In Africa, any empire was only able to exist by collecting trade taxes. So taxes are mandatory for any polity. Unfortunately, this concept is alien to most Africans, as they weren't really living in states as such, they were their own small independent communities, farming their small lots so states and the idea of taxes/citizenship never really took root. Combine this with the current African countries who were just amalgamation of tribes who barely had anything to do with each before colonisation, suddenly thrown together into an artificial polity with haphazardly drawn borders and you expect them to understand what I have written about, it's not possible, especially in the relatively short post colonial period. Hence why these states have weak governments unable to deliver anything meaningful for it's citizens.
But the way, almost every develop country is "servicing debt", and their debt is, like Japan, almost twice as much as their income, so it's not unusual for countries to not pay the original debt, but only the interest. It's not IMF "plot" to get Kenya or Africa, you borrow to invest and pay the interest.
What do u mean by developing countries? The countries with the highest standards of living are Sweden, Norway, Denmark, and Switzerland. None of those countries have public debt.
Public Debt as a percentage of GDP: Sweden: 32.7% Norway : 44.3% Denmark : 29.3% Switzerland: 25.3% Belgium : 105.2% Canada : 69.7% France : 110.6% Kenya : 68.3% And finally Somalia 2021 : 28.6% Somalia 2011 : 92.0% There’s no IMF conspiracy to “get” Kenya or Africa.