Mwalimu-G
Elder Lister
DIPLOMACY`
Ignorance and malicious intent at the heart of the hashtag #IMFStopLoaningKenya
The IMF recently found itself in the eye of the storm as Kenyan keyboard warriors tore at it accusing it of financial imprudence in its decision to award Kenya a USD 2.34 billion loan facility. What these keyboard warriors and those who jumped on the bandwagon demonstrated is a lack of understanding on the operations and indeed importance of public debt.
By George Nyongesa
https://viewpoints.ke/ignorance-and...he-heart-of-the-hashtag-imfstoploaningkenya/#
https://kenyanlist.net/whatsapp://s...the-heart-of-the-hashtag-imfstoploaningkenya/
We are in the digital age; when before we said the pen is mightier than the sword, we now say the keyboard is mightier than the gun or microphone for that matter. In fact, we now have keyboard warriors; people adept with their fingers and brains who fire salvos that leave the enemy stunned. Real wars, with casualties, are fought in the digital war arena with battle strategies and tactics as diverse as the warriors.
If you doubt me, just look at the CEOs, companies, businesses and individuals who have suffered very real world consequences for a battle waged digitally. Donald Trump immediate former president of America perhaps knows this best both as a victor and loser in digital warfare.
Closer home, Kenyans on Twitter or KOT as they are better known have demonstrated their battle efficacy as they have taken on individuals, corporates and even nations that they deem to have crossed their path. This week, they were at it again; their target? The International Monetary Fund, IMF. Through two hashtags: #IMFStopLoaningKenya which as of the second day had over 38,000 tweets and #DearIMF that came second with over 2,000 tweets, the digital army in no uncertain terms expressed its displeasure with the IMF’s relation with Kenya.
So what triggered the KOT army to arms? It was an announcement that the IMF had approved a loan of USD 2.34 billion equivalent to KES 255 billion. According to the IMF, the three-year package is to “… support the next phase of the authorities’ COVID-19 response and their plan to reduce debt vulnerabilities while safeguarding resources to protect vulnerable groups.” This is what angered Kenyans. In addition to the twitter and Facebook battle grounds, there was also a petition to IMF to stop loaning Kenya money than saw over 160,000 people sign it in less than 24 hours. The battle was well underway.
One of the effects of the digital age is the creation of the ability for almost everyone and anyone to tap into an unprecedented cataclysmic power with potential to reach far and wide through viral content. While this has contributed positively in some aspects of our political and socio-economic spheres; the Kenyan case provides a case study of why self-broadcast and unhinged activism is a threat to our society.
In the book Public Debt and the Birth of the Democratic State, David Stasavage notes that increase in government debt in most democratic states has been as the result of tax revenue not keeping pace with the expansion of government spending. He also points out that the degree of democracy in a country affects government expenditure as a result of the population’s ability to impact the government’s priorities.
In a study that sheds light on debt and public expenditure, Economist Lucas J.M Alonso reviewed the European Union’s Member States’ debt-to-GDP ratios above 60 percent between 2008 and 2018. From the study, Alonso points out that whenever the government is under pressure to spend on goods and services demanded by citizens, it always turns to debt financing. He also lists some of government expenditures that have strong correlation with public debt to include intensive government indebtedness to undertake large infrastructure projects, downward pressures and weakening of its local currency, bailouts of corporations in financial distress and insatiable demand for welfare services.
As much as Kenyans may be justified in complaining about public debt, it is important to recognize that with the citizenry’s ever-increasing demand for protection from pandemic shock, affirmative action programs, social protection of the elderly, widows and orphans, as well as first class infrastructure, the government has only two easy options for revenue: increasing taxes or incurring debt. It is against this background that it is instructive to emphatically point out that Kenyans behind the petition to IMF are ignorantly politicizing Kenya’s debt situation.
If any of the sponsors of the hashtag and petition had taken a cursory scan through the internet, they would realize that there is no country on earth without public debt. Some of the countries with first class infrastructure that we admire like the United States, German, France and Japan, or even on our continent, the likes of Nigeria and South Africa, have debts in figures that don’t come easy in your vocabulary. For instance, the United States debt currently stands at USD 28 trillion or 129% of the GDP; and because of emergency spending in response to the coronavirus pandemic, after years of steadily increasing debt, the debt is projected to go even higher.
Debt financing was invented by economists on a very good rationale. In practice, most debts that individuals and even countries undertake are for increasing their productivity. For this reason, loan providers demand to know the purpose for the loan with loans intended for production being looked at favourably. For instance, if you are a person of small means and you wanted to buy a car worth Kshs 1 million, money that you cannot raise at once, you have two sound economic options: one, continue walking until you save enough money and hopefully find the car still selling at the same price, or, two, get the car on a loan facility you can service. In option one, chances are that you may never own a car because in perfect conditions, by the time you have saved the Kshs 1 million, you will find out that those cars are out of market or the price went up. In option two, you own the car faster through a loan you can afford, start using the car thereby increasing your time efficiency, and consequently, increase your productivity which in turn improves your financial situation enabling you to service the loan faster.
On the issue of taxes, let us have some straight talk; because these are the crutches most of us are using in our unmitigated display of ignorance on the economics of debt. First, governments are a tax burden for all citizens. Governments don’t have any other source of income apart from taxation. Originally, governments were supposed to be involved in very limited aspects of society; namely, protection of life, liberty and property. In this case the government had been conceptualized to deal with provision of very minimal services. It is the citizenry, helped by politicians, that demanded for more and more services that led to ever expanding government with an insatiable appetite for taxes.
According to the law of causation, if we want less taxes, let us start by demanding less government services. Let us outsource most of what we demand from the government to the market and entrepreneurs, and hence pay for the services on consumption. We will however find that the market does not share the government’s concerns for public welfare and will be a ruthless provider. However, should we want this, we can easily achieve it through a referendum that redefines the function of our government. If we are serious about such a proposition, then we should not wait for politicians to lead; politicians are beneficiaries of government largesse and it wouldn’t be in their best interest to have a reduced government mandate in society.
Let us now address the key accusation leveled against the government; the one that got Kenyans so rallied up; corruption. The accusation here is that past loans given to Kenya have been misdirected for individual rather than collective gain. The charge here is that Kenyans cannot see the intended outcomes of the loans. Now, let us clear a few things: one, all governments suffer corruption; this is a fact. There is no government in the world without some form of corruption. Two, there is also no doubt that Kenya has a serious problem with corruption. However, do you as a citizen ever see yourself as a conspirator in the entrenchment of corruption? It is the influence of ‘mtu wetu’mentality in public discourse on corruption that continues to make it difficult to institute punitive measures to reduce corruption.
In our debate on corruption, it is not unusual to hear the irrational demands that the fight against corruption should begin with corruption that took place during the Independence regime knowing very well it is impossible. Corrupt individuals cover their tracks and therefore, after such a long time, there is definitely no data to successfully prosecute anyone. It is the corruption that is happening now that we can gather evidence to support successful prosecution but whenever it touches on someone from your religion, tribe or political party, then you come to their rescue. It follows that we are going to have corruption in this country until the day we are disabused of our ‘mtu wetu’mentality. Therefore, let us stop pretending that we are fed up with corruption when our behavior and mentality eloquently says the opposite.
In conclusion, it is important for all of us to appreciate that this country belongs to all of us and it is our responsibility to always act in a manner that ensures it flourishes. Some actions like sponsoring the hashtag #StopLoaningKenya and a petition to IMF are akin to chopping off one’s nose to spite their face. These are actions done in bad faith by individuals but whose outcome can end up perishing us all like fools. These are individuals who refuse to confront facts and choose to pursue their selfish interest in disregard of reality.
It is these individuals, driven by ulterior motives, who continue to oppose president Uhuru Kenyatta’s vision for the country, for known and unknown reasons. They will stop at nothing and will use any and all means available to them to besmirch our country internationally even if it ends hurting us all. It is important that rational Kenyans rise up to resist these gangs of malicious individuals embroiled in unhinged activism that are no different from terrorists’ activities.
I end this glad to see that some sober minded Kenyans have started the hashtag #FruitsOfTheLoan offering concrete evidence of what has been achieved with previous loans
Ignorance and malicious intent at the heart of the hashtag #IMFStopLoaningKenya
The IMF recently found itself in the eye of the storm as Kenyan keyboard warriors tore at it accusing it of financial imprudence in its decision to award Kenya a USD 2.34 billion loan facility. What these keyboard warriors and those who jumped on the bandwagon demonstrated is a lack of understanding on the operations and indeed importance of public debt.
By George Nyongesa
https://viewpoints.ke/ignorance-and...he-heart-of-the-hashtag-imfstoploaningkenya/#
https://kenyanlist.net/whatsapp://s...the-heart-of-the-hashtag-imfstoploaningkenya/
We are in the digital age; when before we said the pen is mightier than the sword, we now say the keyboard is mightier than the gun or microphone for that matter. In fact, we now have keyboard warriors; people adept with their fingers and brains who fire salvos that leave the enemy stunned. Real wars, with casualties, are fought in the digital war arena with battle strategies and tactics as diverse as the warriors.
If you doubt me, just look at the CEOs, companies, businesses and individuals who have suffered very real world consequences for a battle waged digitally. Donald Trump immediate former president of America perhaps knows this best both as a victor and loser in digital warfare.
Closer home, Kenyans on Twitter or KOT as they are better known have demonstrated their battle efficacy as they have taken on individuals, corporates and even nations that they deem to have crossed their path. This week, they were at it again; their target? The International Monetary Fund, IMF. Through two hashtags: #IMFStopLoaningKenya which as of the second day had over 38,000 tweets and #DearIMF that came second with over 2,000 tweets, the digital army in no uncertain terms expressed its displeasure with the IMF’s relation with Kenya.
So what triggered the KOT army to arms? It was an announcement that the IMF had approved a loan of USD 2.34 billion equivalent to KES 255 billion. According to the IMF, the three-year package is to “… support the next phase of the authorities’ COVID-19 response and their plan to reduce debt vulnerabilities while safeguarding resources to protect vulnerable groups.” This is what angered Kenyans. In addition to the twitter and Facebook battle grounds, there was also a petition to IMF to stop loaning Kenya money than saw over 160,000 people sign it in less than 24 hours. The battle was well underway.
One of the effects of the digital age is the creation of the ability for almost everyone and anyone to tap into an unprecedented cataclysmic power with potential to reach far and wide through viral content. While this has contributed positively in some aspects of our political and socio-economic spheres; the Kenyan case provides a case study of why self-broadcast and unhinged activism is a threat to our society.
In the book Public Debt and the Birth of the Democratic State, David Stasavage notes that increase in government debt in most democratic states has been as the result of tax revenue not keeping pace with the expansion of government spending. He also points out that the degree of democracy in a country affects government expenditure as a result of the population’s ability to impact the government’s priorities.
In a study that sheds light on debt and public expenditure, Economist Lucas J.M Alonso reviewed the European Union’s Member States’ debt-to-GDP ratios above 60 percent between 2008 and 2018. From the study, Alonso points out that whenever the government is under pressure to spend on goods and services demanded by citizens, it always turns to debt financing. He also lists some of government expenditures that have strong correlation with public debt to include intensive government indebtedness to undertake large infrastructure projects, downward pressures and weakening of its local currency, bailouts of corporations in financial distress and insatiable demand for welfare services.
As much as Kenyans may be justified in complaining about public debt, it is important to recognize that with the citizenry’s ever-increasing demand for protection from pandemic shock, affirmative action programs, social protection of the elderly, widows and orphans, as well as first class infrastructure, the government has only two easy options for revenue: increasing taxes or incurring debt. It is against this background that it is instructive to emphatically point out that Kenyans behind the petition to IMF are ignorantly politicizing Kenya’s debt situation.
If any of the sponsors of the hashtag and petition had taken a cursory scan through the internet, they would realize that there is no country on earth without public debt. Some of the countries with first class infrastructure that we admire like the United States, German, France and Japan, or even on our continent, the likes of Nigeria and South Africa, have debts in figures that don’t come easy in your vocabulary. For instance, the United States debt currently stands at USD 28 trillion or 129% of the GDP; and because of emergency spending in response to the coronavirus pandemic, after years of steadily increasing debt, the debt is projected to go even higher.
Debt financing was invented by economists on a very good rationale. In practice, most debts that individuals and even countries undertake are for increasing their productivity. For this reason, loan providers demand to know the purpose for the loan with loans intended for production being looked at favourably. For instance, if you are a person of small means and you wanted to buy a car worth Kshs 1 million, money that you cannot raise at once, you have two sound economic options: one, continue walking until you save enough money and hopefully find the car still selling at the same price, or, two, get the car on a loan facility you can service. In option one, chances are that you may never own a car because in perfect conditions, by the time you have saved the Kshs 1 million, you will find out that those cars are out of market or the price went up. In option two, you own the car faster through a loan you can afford, start using the car thereby increasing your time efficiency, and consequently, increase your productivity which in turn improves your financial situation enabling you to service the loan faster.
On the issue of taxes, let us have some straight talk; because these are the crutches most of us are using in our unmitigated display of ignorance on the economics of debt. First, governments are a tax burden for all citizens. Governments don’t have any other source of income apart from taxation. Originally, governments were supposed to be involved in very limited aspects of society; namely, protection of life, liberty and property. In this case the government had been conceptualized to deal with provision of very minimal services. It is the citizenry, helped by politicians, that demanded for more and more services that led to ever expanding government with an insatiable appetite for taxes.
According to the law of causation, if we want less taxes, let us start by demanding less government services. Let us outsource most of what we demand from the government to the market and entrepreneurs, and hence pay for the services on consumption. We will however find that the market does not share the government’s concerns for public welfare and will be a ruthless provider. However, should we want this, we can easily achieve it through a referendum that redefines the function of our government. If we are serious about such a proposition, then we should not wait for politicians to lead; politicians are beneficiaries of government largesse and it wouldn’t be in their best interest to have a reduced government mandate in society.
Let us now address the key accusation leveled against the government; the one that got Kenyans so rallied up; corruption. The accusation here is that past loans given to Kenya have been misdirected for individual rather than collective gain. The charge here is that Kenyans cannot see the intended outcomes of the loans. Now, let us clear a few things: one, all governments suffer corruption; this is a fact. There is no government in the world without some form of corruption. Two, there is also no doubt that Kenya has a serious problem with corruption. However, do you as a citizen ever see yourself as a conspirator in the entrenchment of corruption? It is the influence of ‘mtu wetu’mentality in public discourse on corruption that continues to make it difficult to institute punitive measures to reduce corruption.
In our debate on corruption, it is not unusual to hear the irrational demands that the fight against corruption should begin with corruption that took place during the Independence regime knowing very well it is impossible. Corrupt individuals cover their tracks and therefore, after such a long time, there is definitely no data to successfully prosecute anyone. It is the corruption that is happening now that we can gather evidence to support successful prosecution but whenever it touches on someone from your religion, tribe or political party, then you come to their rescue. It follows that we are going to have corruption in this country until the day we are disabused of our ‘mtu wetu’mentality. Therefore, let us stop pretending that we are fed up with corruption when our behavior and mentality eloquently says the opposite.
In conclusion, it is important for all of us to appreciate that this country belongs to all of us and it is our responsibility to always act in a manner that ensures it flourishes. Some actions like sponsoring the hashtag #StopLoaningKenya and a petition to IMF are akin to chopping off one’s nose to spite their face. These are actions done in bad faith by individuals but whose outcome can end up perishing us all like fools. These are individuals who refuse to confront facts and choose to pursue their selfish interest in disregard of reality.
It is these individuals, driven by ulterior motives, who continue to oppose president Uhuru Kenyatta’s vision for the country, for known and unknown reasons. They will stop at nothing and will use any and all means available to them to besmirch our country internationally even if it ends hurting us all. It is important that rational Kenyans rise up to resist these gangs of malicious individuals embroiled in unhinged activism that are no different from terrorists’ activities.
I end this glad to see that some sober minded Kenyans have started the hashtag #FruitsOfTheLoan offering concrete evidence of what has been achieved with previous loans
