The Kenya Kwanza economic adviser Hon David Ndii has come out to explain why Kenya has lost so much to her neighbouring country; Tanzania and Uganda.
Ndii was answering to a claim by Mwango Capital that Kenya has lost most of its earnings to the two countries.
” “Compared to Regional Economies, KES has lost 20% to the Ugandan Shilling and 13% against the Tanzanian Shilling within the last 12 Months” a statement posted by Mwango Capital read.
In his wisdom, David Ndii narrated that Kenya’s macroeconomic fundamentals including debt, deficits, exports and FDI are presently much weaker than Uganda and TZ.
According to Ndii, the two countries, UG and TZ have not been propping up their currencies artificially.
Ndii says that Kenya is more integrated with global finance hence more exposed to financial shocks.
Our external trade weaker, trade deficit averaging 10% of GDP, Uganda 7.6%, Tanzania 5.3%.
Tourism also punching way below weight. Tanzania earning double in $ terms. Uganda catching up. In % of GDP Uganda close to 2X, TZ 2.6X in latest year.
FDI, this is the crux of the weaker shilling story. Kenya cumulative FDI over th three years 1% of GDP, Tanzania 4.5%. Uganda 10%. Ten times.
Saving grace. Remittances, now approaching 4% of GDP, ahead if Uganda at just under 3% and TZ less than 1%.
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“So how have we paid our way? No prizes for guessing. Public debt. Eurobonds and syndicated bank loans. Up from zero when Uhuru took over to US$10b today. Then the music stopped.” Said Ndii.
Adding: “Last year, just before election govt called off $1.1b Eurobond. That liqudity crunch is still biting. And $2b is due June 2024, largest bond maturity in Africa next year.
“That is Uhurus legacy, whether you want to hear it or not. And there are no solutions, only consequences.”
