Former MPs\' Sh345m secret pay
written by Wuod Aketch , June 04, 2008

Former MPs' Sh345m secret pay deal:

While inflation is hitting Kenyans so hard, why the Sh345m as a pay deal for former MPs who served from 1963-2002?
This is nonsense. I would not like to pay MPs who participated in making Kenya a one party state and contributed partly to the fiasco of the last presidential elections. These MPs had contracts by then and worked according to it's writings. I do not see why these people are getting a new contract.

Marende should explain this secret deal to Kenyans. We are seeing again a situation where things are decided behind doors - there is no watchdog system.
When will this new constitution come out? Kenyans have become slaves of the people who are/were (1963-2002) supposed to serve them.
Aux armes, citoyens!!!

http://www.eastandard.net/news/?id=1143987537

re: Former MPs\' Sh345m secret
written by UrXlnc , June 05, 2008

Former MPs' Sh345m secret pay deal:

While inflation is hitting Kenyans so hard, why the Sh345m as a pay deal for former MPs who served from 1963-2002?
This is nonsense.

Wuod, its unbelievable

The Kenyan tax-payer is the most gullible and most productive cash-cow this world will ever see. Our taxes are for the

a) Highest paid MPs in the world for services we are still trying to figure out

b) Largest cabinet ever, sufficient to run East and Central Africa and still have some to spare

c) largely inefficient, corrupt and lethargic public service, with little or sub-standard public service delivery more geared towards sucking up to the elite with little regard for professionalim (with apology to the handful of hardworking dedicated and conscnientous public service officers trying their best to make a differnece)

d) continue funding the sleaze loopholes created by the severely dilapidated infrastructure and basic services as ingenious leaders create funding sink-holes for cash siphoning.

I believe by the end of the 10th parliament a new fund will be established to cater for the families immediate, extended and illicit of these MPs so that the MPs do not have to "worry with trivia" and therefore pay more attention to sleaze.

CBK
written by observer , June 05, 2008

Dose the central bank of Kenya have a mechanism like the Federal funds rate in the united states to help control the inflation rate?

CBK
written by Stephen Wanyama , June 05, 2008

Yes, CBK should have the powers and the ability (ammunition) to regulate money supply but as is the case elsewhere around the world, there is the danger that imprudent action could worsen the situation. Higher interest rates to mop up excess money, lower (maintained) rates to boost investment? Is the inflation likely to be at all influenced by CBK action, core inflation is after all not too high, and the food and energy component is global and to a degree out of our hands (at least in the short term). Also from before, a cheaper shilling to boost exports or a stronger shilling to moderate the effect of expensive but crucial imports, which way to go?

Safaricom
written by Amir Ibrahim , June 05, 2008

Don't forget the Safcom refunds are coming in a few days. Who would have thought Kenyans had all that money lying about idle.

re: Safaricom
written by UrXlnc , June 05, 2008

Don't forget the Safcom refunds are coming in a few days. Who would have thought Kenyans had all that money lying about idle.

A significant amount of it is bank loans with stiff penalties (interest + service charges + interest + charges + ... u get it, bank laughing all the way to the bank)

talk about creating money from the air ...

Mmmmm
written by Nyabs , June 05, 2008

One, borrowing to buy shares beats the whole concept of investing. Shouldn't funds for investment come from disposable income? Am I missing something here? What if the shares don't perform to one's expectations and actually plummet in value? How then does one service the loan?

Back to inflation: I note with sadness that Kimunya has no intention of reducing fuel prices, which he can easily do through reduction of taxes of petroleum products. This is going to continue hurting us and worsen inflation. Some leadership is needed her and the one who uproots( Kimunya) should provide that leadership.

Two, why not reduce VAT on food items, say by 3 percentage points? This will make food cheaper and free some disposable income that can go to investments.

And lastly, if Kibaki needed a reason to cut down on the size of his cabinet, this is it. Two options for him if he cares to read KI: retain the number of Ministers but tax all salaries and benefits, not only for the Ministers but for all MPs. Or, if he has the stomach for it, rationalize the number of ministries and reduce them to not more than 20. There would be enormous savings to be made from this action.

We are sitting on a time bomb and unless we act, the next acts of hooliganism will not be on stolen elections, but on food prices.

Witch hunting
written by mkosakabila , June 05, 2008

In light of the recent happenings in Kisii (one of the places in Nyanza that remains dear), I've been itching to share this article with you all and I remain concerned:
Edward Miguel, 2005. Poverty and witch killing. Review of Economic Studies 72: 1153-1172.
http://elsa.berkeley.edu/~emiguel/miguel_witch.pdf

Adapted abstract:
This study uses rainfall variation to estimate the impact of income shocks on murder in rural Tanzania. Extreme rainfall, drought or flood, leads to a large increase in the murder of witches,
typically elderly women killed by relatives,but not other murders. The findings provide novel evidence
on the role of income shocks in causing violent crime, and religious violence in particular.

I had literally laughed this study off when I heard of it back in 2002. But I appreciate it better now.

re: Mmmmm
written by a guest , June 05, 2008

Two, why not reduce VAT on food items, say by 3 percentage points? This will make food cheaper and free some disposable income that can go to investments.

I would go a step further and abolish VAT on food items period. I have always found it bizarre we charge VAT on food. VAT on food, in a country as poor as ours? This in a country where the majority of the population, especially in urban areas, spend a significant percentage of there income on food?

I believe a large part of the high inflation is being driven by global commodity and oil prices. Given that our policy makers dont have to spend money on their own petrol and dont eat the common mans food it is not a matter that concerns them.

Is the inflation likely to be at all influenced by CBK action, core inflation is after all not too high, and the food and energy component is global and to a degree out of our hands (at least in the short term)

I guess you are right in that we have little influence on the major drivers of the inflation we are experiencing. Altering interest rates will not bring down oil prices and increase agricultural production. Its appears then that is a policy matter both short and long term. How do we increase agricultural production and energy efficiency?

on Kenyan peculiarities
written by Ngigi wa Kamau , June 05, 2008

There are several dynamics contributing to the official inertia insofar as tackling inflation is concerned.

The natural policy response, in light of underlying inflation of 7.5% (i.e. excluding oil & food crises factors) should be to tighten credit markets especially short term consumptive credit (your credit cards, IPO loans, etc).
However, with Kenyans held hostage by a cabal of moneyed men, this is unlikely to happen.

With significant holdings in banks, marketing agencies, and stock brokerage houses, our policy makers thrive on the credit binges that see Kenyans gorging themselves in a bid to get rich quick.
Hence the marketing hype that has been surrounding IPOs, and the resultant hysteria that ensues as we all rush madly to our piggy banks, mattresses, merry-go rounds, shylocks, and formal lenders believing that our time to 'arrive' is nigh.

Consequently, raising interest rates to tighten credit markets is unfavourable to bank owners, credit card companies and even shylocks, since it will precipitate a more realistic view of our wealth.

More than that, extremely lax regulation (and I am being charitable here) by the Central Bank has meant that Kenya enjoys/suffers (depending on which side you fall on) one of the most glaring gaps between deposit & lending interest rates. Current Fixed Deposit rates hover around 4% while long term loans for Mortgages attract a minimum of 12.5%. This massive 8.5 per cent spread is nothing compared to the 14-15 per cent spread charged on personal unsecured loans and credit cards.


Evidently, if the Central Bank were interested in superior economic management, it would compel banks to raise the minimum interest paid on deposits as happens in economically stable countries from Australia to the EU while simultaneously tightening the credit market to kill off speculative investment and egregious consumption. After all, we should all live within our means. However, to fob off journalistic queries, the standard riposte is that Kenya is a free market and government agencies do not meddle in market operations. This intellectual dishonesty (CBK is a regulator

...
written by Ngigi wa Kamau , June 05, 2008

There are several dynamics contributing to the official inertia insofar as tackling inflation is concerned.

The natural policy response, in light of underlying inflation of 7.5% (i.e. excluding oil & food crises factors) should be to tighten credit markets especially short term consumptive credit (your credit cards, IPO loans, etc).

However, with Kenyans held hostage by a cabal of moneyed men, this is unlikely to happen.

With significant holdings in banks, marketing agencies, and stock brokerage houses, our policy makers thrive on the credit binges that see Kenyans gorging themselves in a bid to get rich quick.

Hence the marketing hype that has been surrounding IPOs, and the resultant hysteria that ensues as we all rush madly to our piggy banks, mattresses, merry-go rounds, shylocks, and formal lenders believing that our time to 'arrive' is nigh.

Consequently, raising interest rates to tighten credit markets is unfavourable to bank owners, credit card companies and even shylocks, since it will precipitate a more realistic view of our wealth. More than that, extremely lax regulation (and I am being charitable here) by the Central Bank has meant that Kenya enjoys/suffers (depending on which side you fall on) one of the most glaring gaps between deposit & lending interest rates. Current Fixed Deposit rates hover around 4% while long term loans for Mortgages attract a minimum of 12.5%. This massive 8.5 per cent spread is nothing compared to the 14-15 per cent spread charged on personal unsecured loans and credit cards.

Evidently, if the Central Bank were interested in superior economic management, it would compel banks to raise the minimum interest paid on deposits as happens in economically stable countries from Australia to the EU while simultaneously tightening the credit market to kill off speculative investment and egregious consumption. After all, we should all live within our means. However, to fob off journalistic queries, the standard riposte is that Kenya is a free market and government agencies do not meddle in market operations. This intellectual dishonesty (CBK is a regulator