By S P
Fears of Global currency warfare, as Jubilee key foreign ally China devalues its currency. If other countries follow suit, this may greatly destabilize the global, and more-so Kenya’s economy.
Statehouse operatives are rumoured to be restless and are in touch with top Treasury officials for an up-date of Beijing moves and what impact will be on Kenya’s debt repayment to China.
China’s economy evidently stagnating, and analysts fear these are just last kicks of a declining Asian economic powerhouse, whose economic progress is pegged on unsustainable and unfair trade practices. Investors are running scared, coz it would mean lesser margins on their investments.
Of course China’s weakening economy is seeking to boost exports, but without caring about the cataclysmic disruptive effects of their evil actions, solely out of self interest. China’s cost of doing business has recently been on the rise, and American manufacturers, no longer find it cost effective to manufacture goods in China (and betray their own country). The margins have to be really good to justify the unpatriotic act of an American investing in China. That’s why they are moving to either Mexico, Brazil or the USA.
Kenya is a massive loser, as it has over the last decade, borrowed heavily based off of Yuan’s previous value, which means that the buying power of whatever Kenya borrowed in the past has further been diminished in value within the last 24 hrs. Yet the CS Henry Rotich is yet to call a press conference to calm the markets, and retain investor confidence.
Kenya had recently been heavily borrowing from China, without actually diversifying that debt, with a huge chunk of that debt emanating from China, which further intensifies the risk, by putting 90% of our eggs in one basket. And now those eggs just cracked!
By that move(devaluation of its currency), China has just conned Kenya of billions of Dollars. Yet the 2015-2016 budget ran into Sh2.1 trillion with hundreds of billions of shillings of a deep budget hole pegged on hopes of borrowing in Chinese Yuan. Cheap is expensive.
This Jubilee administration is mortgaging our country, with poorly negotiated deals that will in due course be a heavy burden on the shoulders of the Kenyan taxpayer. This is bad news coming just a few days after our sugar industry was mortgaged to Uganda, in exchange for milk business.