tajiri wrote:Interesting take on the governor.. I would suggest that his term be renewed nobody would understand his strategy!!! He needs to get us out of our mess. We talk of low inflation yet the reality is different. We calculate our inflation without factors such as fuel yet more than 50% of inflation is dependant on fuel /energy prices. We continue to borrow very expensively from the local markets. Why borrow locally at expensive rates yet rates are lowerfrom external institutions. This will maintain high interest rates as banks would rather have risk free government instruments. If you looked through CBK website, local borrowing is at an all time high. Our children and grandchildren will pay this debt. Invariably taxes mus rise.
I suppose he could advise the government on prudence and better debt control. Considering that part of our budget is funded by borrowing, things can only get worse.
On the contrary, if you have loads of cash to invest and avoid taxes or own a bank, he is a magnificient governor. The figures of inflation of about 5% are random numbers like a population of 1 million in kibera, at best fantasy.
Mate, local funding for govt debt is always the best option. It's exactly identical to HSBC's strategy for all their lending to be backed by bank account deposits, almost exclusively (or Japan's 80-90% dependence on domestic lending for its bonds). Local borrowers are the most likely to understand the true cost of money, the risks with lending to the government and when to cut and run...because, surprise-surprise, they live there, work there, etc.!
Your assertion about inflation is understandable..everyone disagrees with inflation stats because the basket of goods used to calculate inflation differs from each individual's view. (eg, I may spend less on transport and more on Kenchic and pricey imported spirits than the average Kenyan of which there are 30 Million plus, excluding companies). Lesson, nobody experiences the average price rises because the average is a combination of millions of buyers!