EnglishEdward
Deity
I sense a default coming.
The Africa Thread
- Thread starter Borachio
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Zardnaar
Deity
Your economy tanks, can't import stuff and your country goes bankrupt?
EnglishEdward
Deity
As the glowing Wikipedia article
en.wikipedia.org
has hardly been updated since 2019,
I suspect that is already happening.
Economy of Kenya - Wikipedia
has hardly been updated since 2019,
I suspect that is already happening.
I cannot see how not being able to borrow more money can be worse than than level of dept servicing? It could be that they are actually still borrowing more than they are paying back, but that is not the way I read it. I read it that there was a flurry of corrupt borrowing and now they are paying it back.
I think Kenya has a significant export market, a lot of expensive fruit and flowers we get here come from Kenya.
Snowygerry
Deity
Coffee apparently, I better go make a cup 
oec.world
The Observatory of Economic Complexity
The world's leading data visualization tool for international trade data.
Belgium seems really big in the world of Antiknock. I am amazed that Kenya spends $10 million in total on petrol additives.Coffee apparently, I better go make a cup
The Observatory of Economic Complexity
The world's leading data visualization tool for international trade data.
Spoiler Amazing how different the UK and Belgium are in this regard :
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Snowygerry
Deity
Maybe it is just shipped to Kenya and distributed from there, idk. how these things work exactly.
They may not be the final consumer...? Or you can ship from the UK to Belgium and from here to Kenya.
They may not be the final consumer...? Or you can ship from the UK to Belgium and from here to Kenya.
That makes sense. The differences was more about the >$100 million we spend each year on Kenyan tea compared to what you spend on Coffee. I had not realised how dominant Kenya was in the tea export market, or how small the UK is the in import market.
Spoiler Tea :
EnglishEdward
Deity
I doubt the Kenya government defaulting and/or going bankrupt
would have much impact upon the supply of coffee or tea.
It might impact the supply of perishable fresh veg and flowers
by air, but that is arguably ecologically unsustainable.
would have much impact upon the supply of coffee or tea.
It might impact the supply of perishable fresh veg and flowers
by air, but that is arguably ecologically unsustainable.
I have to admit this is really stretching my understanding. From the OEC site, the total trade of Kenya is exports = $7.34B ($136 per person) and imports are $25.5B ($473 per person). From the World Bank General government final consumption expenditure = $13.92B which is 12.3% of GDP. I cannot find any better number for how much they are spending servicing the debt other than the "7 out of every 10 shillings collected go to pay debt" quoted above. If that means they spend 3 of every 10 shillings collected on general government final consumption expenditure then they spend $32.48B (13.92/0.3-13.92) servicing the debt which is about twice the trade deficit. Therefore defaulting should not impact imports.
There must be someone that can do these sums better than I?
Kenyan tourism dollars in 2022 were over 2 billion USD. Rioting will not improve that amount.
Zardnaar
Deity
Zimbabwe come to mind. Can always be worse.
Unconditional loans don't really fix the original problem which would be government spending or corruption or both.
They would need another bail out in the near future. Debt to gdp ratio isn't bad which indicates government revenue is an issue.
Why? The problem is a load of vanity projects. 80 - 90% of the Chinese debt is one failing railway, and all the money was spent on Chinese construction contracts.. Those have all long gone.
Zardnaar
Deity
Are these vanity projects Zimbabwe or Kenya?
I regard belt and road as an outright debt trap.
Vanity projects are a recurring theme with them along with outright corruption.
I am talking about Kenya. Agricultural nationalisation and land redistribution have nothing to do with national default. The solution to a debt trap is default.
Zardnaar
Deity
There's usually consequences there. Idk the particulars of a deal with China. I'm guessing they used national assets as collateral.
So they could nationalize them and suffer the Chinese consequences whatever they maybe.
That is only a vote in parliament away from cancellation. There is a thing called sovereignty.
Zardnaar
Deity
There is but theres consequences. Sanctions, foreign loans dry up, whatever China decides to do.
And then you have people online shrieking about those consequences.
Eg North Korea deliberately defaulted on loans now no one will lend them money.
IDK what those consequences well be.
That is about all that happens. It gets harder to get foreign loans for a while. Now the sums I did above would make much more sense if they were actually still borrowing more than they were spending in servicing the debt, and in that case they probably should keep taking the money for as long as they can.
If however they are currently sending more money out than they are getting in cutting off both seems like it would be positive.
I am pretty sure that is not the Kenyan states biggest problem right now.
It is true that North Korea deliberately defaulted on loans. It is also true that now no one will lend them money. Those are not totally directly causally related.that now no one will lend them money. Those are not totally directly causally related.
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