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Monday 06th of January 2020 |
06-JAN-2020 :: The Assassination (The Escalation of 'Shadow War') Law & Politics |
The attack on Friday authorized by U.S. President Donald Trump on Iran’s now slain military commander Qassem Soleimani, the Iraqi militia leader Abu Mahdi al-Muhandis and others was was a major escalation in the “shadow war” Let me begin with a selection of comments;
The New York Times' Rukmini Callimachi wrote the evidence suggesting there was to be an imminent attack on American targets is “razor thin” and that Trump was presented a menu of options for how to retaliate. Killing Suleimani was the “far out option” “This is more than just bloodying Iran’s nose,” Stephen Innes, chief market strategist at AxiTrader Ltd., said in a note. “This is an aggressive show of force and an outright provocation that could trigger another Middle East war.” “This is a seismic event in the region,” said Jason Bordoff, Columbia University. “This is how U.S.-Iran tit-for-tat spirals out of control. Iran’s response will be severe and deadly. And certainly may include escalating attacks on energy infrastructure.” ''But a response will have to come as this is nothing short of a declaration of war to a cornered country that has increasingly less to lose. The risks of miscalculation are at an all-time high'' Vali Nasr. I worked the Iran account for years at the NSC under two Presidents. I’m honestly terrified right now that we don’t have a functioning national security process to evaluate options and prepare for contingencies said @Kellymagsamen The Crisis Group's Robert Malley Told the @nytimes: “Whether President Trump intended it or not, it is, for all practical purposes, a declaration of war.” The Truth is that General Soleimani along with Christian Russia and the courageous Syrian people, KEPT 3 & 1/2 million Christians in Syria from being slaughtered by ISIS and al Qaeda! @DrDavidDuke.
Qasem Soleimani was an iconic Figure known as The “Commander of Hearts” and “Soleiman the Magnificent” a reader of Gabriel García Márquez and of course the Leader of Iran’s Quds Force whom a a former C.I.A. officer called the “most powerful operative in the Middle East today.” @Newyorker. In an article in the New Yorker, Dexter Filkins wrote
When Suleimani appears in public—often to speak at veterans’ events or to meet with Khamenei—he carries himself inconspicuously and rarely raises his voice, exhibiting a trait that Arabs call khilib, or understated charisma. “He is so short, but he has this presence,” a former senior Iraqi official told me. “There will be ten people in a room, and when Suleimani walks in he doesn’t come and sit with you. He sits over there on the other side of room, by himself, in a very quiet way. Doesn’t speak, doesn’t comment, just sits and listens. And so of course everyone is thinking only about him.”
“When I see the children of the martyrs, I want to smell their scent, and I lose myself.”
It was Sulemaini who led the fight against Saddam As Revolutionary Guard commanders, he belonged to a small fraternity formed during the Sacred Defense, the name given to the Iran-Iraq War, which lasted from 1980 to 1988 and left as many as a million people dead. “This is the Dasht-e-Abbas Road,” Suleimani said, pointing into the valley below. “This area stood between us and the enemy.” Later, Suleimani and the group stand on the banks of a creek, where he reads aloud the names of fallen Iranian soldiers, his voice trembling with emotion. During a break, he speaks with an interviewer, and describes the fighting in near-mystical terms. “The battlefield is mankind’s lost paradise—the paradise in which morality and human conduct are at their highest,” he says. “One type of paradise that men imagine is about streams, beautiful maidens, and lush landscape. But there is another kind of paradise—the battlefield.”
The front, he said, was “the lost paradise of the human beings.”
The Supreme Leader, who usually reserves his highest praise for fallen soldiers, has referred to Suleimani as “a living martyr of the revolution.”
“In the end, he drank the sweet syrup of martyrdom.”
Qasem Soleimani resisted Saddam, he resisted the Taliban, he resisted IS and all that is left of him is his ring. His Assassination is ''peak'' Netanyahu, Pompeo, Maryam Rajavi, Saudi ''cut off the head of the snake'' made on the fly ''rogue''''Wag the Dog'' Foreign Policy. We are now in an unfathomable and entirely unpredictable and non linear Phase
Iran’s supreme leader, Ayatollah Ali Khamenei, vowed that “severe retaliation” awaits the killers of Soleimani.
At the beginning of From Russia With Love (the movie not the book), Kronsteenn is summoned to Blofeld’s lair to discuss the plot to steal the super-secret ‘Lektor Decoder’ and kill Bond. Kronsteen outlines to Blofeld his plan
Blofeld [read Trump]: Kronsteen, you are sure this plan is foolproof? Kronsteen [read Pompeo]: Yes it is, because I have anticipated every possible variation of counter-move.
Let me predict some counter moves.
Pompeo tweeted a Photo of about 20 Iraqis [I joke not] Iraqis — Iraqis — dancing in the street for freedom; thankful that General Soleimani is no more. @SecPompeo I responded by asking Are you prepared for 1m Iraqis at the Embassy in Baghdad next Friday @SecPompeo ? What happens if Ayatollah Sistani issues a fatwa asking US troops to leave? The first prediction is that the US Iraq misadventure is now over, the only open question is around the timing.
The dogs of war is a phrase spoken by Mark Antony in Act 3, Scene 1, line 273 of William Shakespeare's Julius Caesar: "Cry 'Havoc!,' and let slip the dogs of war." The Iranians kept their Allies from Yemen to Lebanon to the Eastern Province in Saudi Arabia to Bahrain and all points in between on a leash. Trump released that leash.
Brent futures rose 3.5% on Friday, the highest since the attacks on Saudi Arabia’s oil facilities in September.Brent crude for March settlement rose $2.35 a barrel to $68.60, after rising as much 4.9% earlier. West Texas Intermediate for February delivery added $1.87 to settle at $63.05 a barrel, after advancing as much as 4.8%. The strike also escalates an already tense three-way situation between the U.S., Iran and Iraq. The two Middle East countries combined pumped more than 6.7 million barrels a day of oil last month, according to data compiled by Bloomberg, more than one-fifth of OPEC output. Exports from both countries rely on the Strait of Hormuz, the narrow and crucial oil and natural gas shipping choke-point.I expect Oil to come off the boil this week because Iran will not react immediately but the spike risk will remain sky high and the price will spike when the counter move is made.
This is an Archduke Franz Ferdinand moment. Archduke Franz Ferdinand Carl Ludwig Joseph Maria of Austria (18 December 1863 – 28 June 1914) was the heir presumptive to the throne of Austria-Hungary. His assassination in Sarajevo is considered the most immediate cause of World War I.
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Thousands gather in Baghdad to mourn Soleimani, others killed in U.S. air strike @Reuters. Law & Politics |
Thousands of mourners gathered in Baghdad on Saturday ahead of a funeral procession for Iran’s slain military commander Qassem Soleimani, Iraqi militia leader Abu Mahdi al-Muhandis and others killed in a U.S. air strike in Iraq. Friday’s attack on Baghdad airport, authorized by U.S. President Donald Trump, was a major escalation in a “shadow war” in the Middle East between Iran and the United States and American allies, principally Israel and Saudi Arabia. Soleimani was Tehran’s most prominent military commander and the architect of its growing influence in the Middle East. Muhandis was the deputy commander of Iraq’s Popular Mobilisation Forces (PMF) umbrella body of paramilitary groups. The PMF are planning an elaborate funeral procession for both men and the others who died, starting in Baghdad’s heavily fortified Green Zone, moving towards the Shi’ite holy city of Kerbala and ending in the Shi’ite holy city of Najaf. Mourners started gathering in Baghdad’s streets in the morning ahead of the start of the procession, waving Iraqi and militia flags in a somber atmosphere.
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Brent futures rose 3.5% on Friday, the highest since the attacks on Saudi Arabia's oil facilities in September. Law & Politics |
The airstrike near Baghdad airport killed Qassem Soleimani, the Iranian general who led the Revolutionary Guards’ Quds force. The U.S. intends to send “thousands of additional” troops to the Middle East amid rising regional tensions, CNN reported, citing an unidentified U.S. defense official. “This is a seismic event in the region,” said Jason Bordoff, a former Barack Obama administration official who now works for Columbia University. “This is how U.S.-Iran tit-for-tat spirals out of control. Iran’s response will be severe and deadly. And certainly may include escalating attacks on energy infrastructure.” Brent crude for March settlement rose $2.35 a barrel to $68.60, after rising as much 4.9% earlier. The global benchmark’s bullish options bias was the biggest since early November while the December 2020 contract was at the widest premium to December 2021 since October 2018. West Texas Intermediate for February delivery added $1.87 to settle at $63.05 a barrel, after advancing as much as 4.8%. While no oil installations or production were affected, targeting one of Iran’s most powerful generals ratchets up tension between Washington and Tehran, heightening fears of an armed confrontation that could pull in other countries. Iran’s supreme leader, Ayatollah Ali Khamenei, vowed that “severe retaliation” awaits the killers of Soleimani. The strike also escalates an already tense three-way situation between the U.S., Iran and Iraq. The two Middle East countries combined pumped more than 6.7 million barrels a day of oil last month, according to data compiled by Bloomberg, more than one-fifth of OPEC output. Exports from both countries rely on the Strait of Hormuz, the narrow and crucial oil and natural gas shipping choke-point. “This is more than just bloodying Iran’s nose,” Stephen Innes, chief market strategist at AxiTrader Ltd., said in a note. “This is an aggressive show of force and an outright provocation that could trigger another Middle East war.”
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Some thoughts on #Soleimani's assassination @AliVaez Law & Politics |
first, this was not a far-fetched scenario. @khamenei_ir used to call him the living martyr for a reason. Almost every US admin in the past 2 decades had him in their crosshairs but calculated that the risks outweigh the potential benefits 2| But the war-mongers that this isolationist US president surrounded himself with were very keen on this objective for a while, thinking mistakenly that it would neuter and neutralize Iran's regional strategy: 3| has vowed vengeance. It now has to decide whether reprisal comes in line with Khamenei’s characteristic proportional response or not, direct or indirect, immediate or deferred, and in Iraq or elsewhere. 4| But a response will have to come as this is nothing short of a declaration of war to a cornered country that has increasingly less to lose. The risks of miscalculation are at an all-time high. Most of our Trigger List flashpoints are now blinking red: 5| Tehran might calculate that a proportional response might not invite a U.S. counter-attack, or it might deem a disproportionate response a deterrence against further escalation by a U.S. president who says he is averse to Middle Eastern quagmires. 7| The US might have to counter-attack depending on what Iran does, which could trigger an escalatory cycle that could easily spiral out of control as we have been warning for months now: 10| Also 2) Killing Muhandis and so blatantly undermining Iraqi sovereignty again & again have rendered defending US presence and military bases in Iraq an impossible task for Iraqi security forces. A humiliating departure for the US from Iraq now seems inevitable. 11| As for 3) it's now almost guaranteed that the Iranian parliament will fall into the hands of the most hardline and militant elements within Iran. So in the words of @valinasr, @realDonaldTrump seems to have managed to get regime change in Iran but not the kind that he wanted.
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The Killing of Qassem Suleimani Is Tantamount to an Act of War @Newyorker Law & Politics |
On orders from President Trump, the United States killed Major General Qassem Suleimani, the leader of Iran’s élite Quds Force and the mastermind of its military operations across the Middle East, in an overnight air strike at Baghdad’s International Airport. The assassination was the boldest U.S. act in confronting Iran since the 1979 revolution, tantamount to an act of war. A brief statement from the Pentagon described it as a “decisive defensive action” designed to protect U.S. personnel abroad. But the strike represented a stunning escalation between Washington and Tehran, and it may well have the reverse effect.
Iran’s Supreme Leader, Ayatollah Ali Khamenei, declared three days of public mourning and warned that “harsh vengeance awaits those criminals behind martyrdom of General Suleimani.” He moved quickly to name Brigadier General Esmail Gha’ani, who had worked closely with Suleimani, as the new Quds Force commander.
“The war front is mankind’s lost paradise,” Suleimani was quoted as saying, in 2009. “One type of paradise that is portrayed for mankind is streams, beautiful nymphs and greeneries. But there is another kind of paradise.” The front, he said, was “the lost paradise of the human beings.” Thousands of followers died under his leadership.
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A former C.I.A. officer calls Suleimani, the head of Iran's Quds Force, the "most powerful operative in the Middle East today." @Newyorker Law & Politics |
Before Shateri’s funeral, Ayatollah Ali Khamenei, the country’s Supreme Leader, released a note of praise: “In the end, he drank the sweet syrup of martyrdom.”
Kneeling in the second row on the mosque’s carpeted floor was Major General Qassem Suleimani, the Quds Force’s leader: a small man of fifty-six, with silver hair, a close-cropped beard, and a look of intense self-containment. It was Suleimani who had sent Shateri, an old and trusted friend, to his death. As Revolutionary Guard commanders, he and Shateri belonged to a small fraternity formed during the Sacred Defense, the name given to the Iran-Iraq War, which lasted from 1980 to 1988 and left as many as a million people dead. It was a catastrophic fight, but for Iran it was the beginning of a three-decade project to build a Shiite sphere of influence, stretching across Iraq and Syria to the Mediterranean.
When Suleimani appears in public—often to speak at veterans’ events or to meet with Khamenei—he carries himself inconspicuously and rarely raises his voice, exhibiting a trait that Arabs call khilib, or understated charisma. “He is so short, but he has this presence,” a former senior Iraqi official told me. “There will be ten people in a room, and when Suleimani walks in he doesn’t come and sit with you. He sits over there on the other side of room, by himself, in a very quiet way. Doesn’t speak, doesn’t comment, just sits and listens. And so of course everyone is thinking only about him.”
“When I see the children of the martyrs, I want to smell their scent, and I lose myself.”
For Suleimani, saving Assad seemed a matter of pride, especially if it meant distinguishing himself from the Americans. “Suleimani told us the Iranians would do whatever was necessary,” a former Iraqi leader told me. “He said, ‘We’re not like the Americans. We don’t abandon our friends.’ ”
The Supreme Leader, who usually reserves his highest praise for fallen soldiers, has referred to Suleimani as “a living martyr of the revolution.”
“This is the Dasht-e-Abbas Road,” Suleimani says, pointing into the valley below. “This area stood between us and the enemy.” Later, Suleimani and the group stand on the banks of a creek, where he reads aloud the names of fallen Iranian soldiers, his voice trembling with emotion. During a break, he speaks with an interviewer, and describes the fighting in near-mystical terms. “The battlefield is mankind’s lost paradise—the paradise in which morality and human conduct are at their highest,” he says. “One type of paradise that men imagine is about streams, beautiful maidens, and lush landscape. But there is another kind of paradise—the battlefield.”
The good will didn’t last. In January, 2002, Crocker, who was by then the deputy chief of the American Embassy in Kabul, was awakened one night by aides, who told him that President George W. Bush, in his State of the Union Address, had named Iran as part of an “Axis of Evil.” Like many senior diplomats, Crocker was caught off guard. He saw the negotiator the next day at the U.N. compound in Kabul, and he was furious. “You completely damaged me,” Crocker recalled him saying. “Suleimani is in a tearing rage. He feels compromised.” The negotiator told Crocker that, at great political risk, Suleimani had been contemplating a complete reëvaluation of the United States, saying, “Maybe it’s time to rethink our relationship with the Americans.” The Axis of Evil speech brought the meetings to an end. Reformers inside the government, who had advocated a rapprochement with the United States, were put on the defensive. Recalling that time, Crocker shook his head. “We were just that close,” he said. “One word in one speech changed history.”
“Suleimani was lucky,” Dagan, the former Mossad chief, told me, referring to the raid. “It’s important to be lucky.”
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Deutsche Bank's loans to Donald Trump were underwritten by Russian state-owned VTB Bank, according to whistleblower FBI Forensic News H/T @ScottMStedman Law & Politics |
Deutsche Bank’s loans to Donald Trump were underwritten by Russian state-owned VTB Bank, according to the whistleblower whose collection of thousands of bank documents and internal communications have captured the recent attention of federal investigators. Val Broeksmit acquired the emails and files of his late father, Deutsche Bank executive William S. Broeksmit, after Broeksmit tragically took his own life in 2014. Val informed the FBI in late 2019 about his knowledge of VTB’s underwriting of Trump’s loans, information he attributed to a network of sources connected to the bank he cultivated over the past five-plus years. Underwriting is the process where financial institutions assess the ability of potential customers to fulfill their obligations. Underwriters have access to “credit and financial information, as well as the state of the [property],” according to US News, though underwriters can sometimes be unknown to the person seeking the loan. Forensic News is not confirming the underlying claim that VTB underwrote Trump’s loans from Deutsche Bank.
Val Broeksmit’s full statement is below:
The Russian state bank VTB underwrote loans to Donald Trump via Deutsche Bank. Over the course of Trump’s relationship with DB, an inordinate amount of questionable, mismanaged & risky loans approved by Deutsche Bank to Trump required his Personal Guarantee which, over time, also lost its value. Trump’s team at DB sought out creative ways to circumvent the varied protections DB’s compliance team institutionally implemented, & whether by happenstance or by design Trump’s loans became underwritten by Russia’s own VTB. I informed the FBI of this in 2019.
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13-AUG-2019 :: The Feedback Loop Phenomenon Emerging Markets |
China has exerted the power of pull over a vast swathe of the world over the last two decades. We can call it the China, Asia, EM and Frontier markets feedback loop. This feedback loop has been largely a positive one for the last two decades. This will surely exert serious downside pressure on those countries in the Feed- back Loop. The Purest Proxy for the Chi- na, Asia, EM and Frontier markets feedback loop phenomenon is the South African Rand aka the ZAR.
Frontier Markets
Sub Saharan Africa
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Next Africa: Trade, Risks and Resolutions @business Africa |
Much of Africa faces bleak economic prospects in 2020, including its biggest economies, South Africa and Nigeria. But the continent can't be accused of lacking ambition. If all goes to plan, the world’s largest free-trade zone by area will start in July. The idea is to gradually integrate the economies of 53 of the continent’s 54 nations (Eritrea hasn’t signed up) to create a zone covering 1.2 billion people, with a combined gross domestic product of $2.5 trillion. The African Union-led agreement is certainly needed. Only 15% of Africa’s trade is between nations on the continent, compared with over 70% in Europe. To blame: a myriad of ever-changing regulations, snarled border posts and poor infrastructure. For the African Continental Free Trade Area to succeed, many nations are going to have to put aside their protectionist tendencies and lessen dependence on customs revenue. To start, the big winners will be countries with an industrial base — most notably South Africa and Egypt — that can be used to sell manufactured goods to the African middle class. South Africa: Tough Decisions President Cyril Ramaphosa's 2020 resolutions start with his plans for South Africa's failing state-owned enterprises. The national airline is in bankruptcy protection. Power utility Eskom is struggling to keep the electricity on and still lacks a solution to its crippling debt. The Passenger Rail Agency of South Africa, which runs the continent’s largest commuter rail service, is under administration. Ramaphosa says the state companies can be saved with “extraordinary effort and, in some cases, tough decisions.” A willingness to follow through could make all the difference for South Africa’s economy. The country faces the near-inevitable loss of its final investment-grade credit rating during the first quarter. Ramaphosa will either be remembered as the president who set the economy on a recovery footing or drove it deeper into malaise. The next 12 months will be crucial. Nigeria: Downside Risk Nigeria’s lucrative carry trade is losing its charm and is putting the naira at risk of devaluation in 2020. The country's central bank offered rates that were once as high as 18% on bills known as open-market operations, or OMOs, sold to boost reserves and protect the naira. About 17 trillion naira ($47 billion) of these securities are now outstanding with around a third held by foreigners. A chunk of OMO notes mature early next year and it’s uncertain whether foreign holders will renew. Yields on the securities are now lower at an average of 13%, and liquidity is limited after the central bank barred local pension funds from investing. Dollar outflows from the country are higher than inflows and external reserves are down almost 10% since June. Oil revenues could support the naira if crude prices remain stable. Renaissance Capital estimates the currency is 28% overvalued, though. The downside risk is high. Ghana and Ivory Coast: History Lessons Ghana and Ivory Coast will need to show they’ve learned from the mistakes of previous ballots as West Africa’s second- and third-largest economies prepare for elections. President Nana Akufo-Addo’s commitment to fiscal discipline will be severely tested in Ghana, which has a record of budget blowouts in election years. The president is likely to compete with predecessor John Mahama in the December polls. In Ivory Coast, stability is at risk at a time when political alliances are shifting. President Alassane Ouattara, who has yet to say whether he’ll seek a third term, could face his biggest challenge from former allies. At stake is an economy that’s grown by more than 7% annually since 2012. Ivory Coast’s last power transition was in 2011, when Ouattara first took office. At least 3,000 people died then in five-months of post-election violence after ex-President Laurent Gbagbo initially refused to accept defeat. Kenya: Resist the Urge Now comes the hard part for Kenyan President Uhuru Kenyatta. A decision to scrap interest-rate caps jump-started loan talks with the International Monetary Fund. The IMF wants him to increase revenue to keep up with spending pressures. But despite revenue shortfalls, Kenyatta says it’s imperative to keep funding projects in manufacturing, housing, health care and farming for economic growth to continue at above 5%. To do so, his administration is willing to allow debt to rise nearly 10% to an anticipated 6.7 trillion shillings ($65.9 billion) next year. IMF Managing Director Kristalina Georgieva in November voiced concern about Kenya’s swelling borrowings. After doubling its debt ceiling to almost match the size of its $100 billion economy, the government will need to show fiscal discipline.
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29-JUL-2019 :: Africa is proudly moving counter-trend with the African Continental Free Trade Area (AfCTA). Africa |
The overarching and interestingly at a time when the Rest of the World seems to be embarked on a process of Fragmentation and Globalisation coming apart at the seams, Africa is proudly moving counter-trend with the African Continental Free Trade Area (AfCTA). Of course, the Devil is in the Details of the execution and such things can simply fall apart in a deluge of Non-Tariff Barriers but it is a Silver Bullet particularly if we allow the free circulation of our People who are natural Entrepreneurs. Just look outside, there are markets just about everywhere.
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09-DEC-2019 :: Time to big up the dosage of Quaaludes Africa |
This week Moody’s Investor Services downgraded Nigeria to negative and we learnt that Foreign Investors are propping up the Naira to the tune of NGN5.8 trillion ($16 billion) via short-term certificates. Everyone knows how this story ends. When the music stops, everyone will dash for the Exit and the currency will collapse just like its collapsing in Lusaka as we speak. Nigeria matters and it has not posted positive GDP growth above its population growth for a number of years. Essentially Baba Go Slow’s Nigeria is in reverse gear as is Ramaphosa’s South Africa which reported -0.6% Q3 2019 GDP. President Ramaphosa, however, was awarded the Grand Croix de l’Orde National du Merit, on behalf of the Grand Master, His Excellency Pre- sident Alpha Conde of the Republic of Guinea. The two biggest beasts in Sub Saharan Africa are essentially providing fewer opportunities and their Citizens have been becoming worse off year after year for more than five years now.
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EAC projected growth rates a mirage due to debt, deficits @The_EastAfrican Africa |
East Africa’s economic landscape is replete with contradictions: While it is cited as being ahead in economic growth in sub-Saharan Africa with its GDP projected to expand by 6.1 per cent against a continental average of 3.6 per cent in 2020, the region is swimming in tough economic times. Across the region, analysts caution that economic growth is largely superficial since it is being driven by public infrastructure investments as opposed to being private sector-driven. “Rising debt servicing costs against a backdrop of sluggish revenue growth will limit governments’ capacity to stimulate economic activity and/or worsen fiscal balances, posing downside risks to investor sentiment,” said a Fitch Solutions report released in December. Analysts at the Institute of Chartered Accountants in England and Wales (ICAEW) project a slowdown in the region’s economic growth to 6.1 per cent in 2020 from 6.3 per cent in 2019. EAC countries are therefore facing another challenging year of balancing budgetary books amid the burdens of servicing public debts, failure to meet revenue targets driven by a slugging private sector, shedding of jobs, flattening FDIs and declining volumes of exports. Across the region, over 40 per cent of revenues will be directed towards debt servicing at a time when the IMF is warning that debt across the region is gravitating towards unsustainable levels. The new year finds the region saddled with debt to the tune of $100 billion, widening budget deficits and expanding current accounts, as governments undertake mega projects. Kenya and Tanzania’s total public debts as at June 2019 stood at $58.1 billion and $22.5 billion respectively, while Uganda’s stock of public loans was $12 billion and Rwanda’s $5.4 billion. Across the region, key sectors of the economy like agriculture, tourism, building and construction and transport are underperforming while manufacturing has slowed down and intraregional trade is on a decline precipitated by both tariff and non-tariff barriers among the EAC member states. With traditional exports declining and imports receipts rising, putting pressure on the current account, remittances are emerging as the main source of foreign exchange. In Tanzania, analysts at Fitch Solutions are forecasting a sluggish year for the economy, a situation that could be compounded by national elections in October. In 2020, Tanzania’s economy is projected to grow at 5.3 per cent, way below a 10-year average of 6.3 per cent registered between 2007 and 2017 on the backdrop of weak investment, poor agricultural harvest and challenging global macroeconomic headwinds. “Private consumption and government fiscal stimulus will be supportive of growth, but will be insufficient to prevent the economy performing below its potential over the coming quarters,” said Fitch. It added that with FDIs declining, budget deficit is bound to increase to 3.7 per cent in the 2020/21 financial year from 3.5 per cent this year. Despite the gloomy projections, Tanzania’s Minister for Finance and Planning Dr Phillip Mpango said the country has not exhausted its window for borrowing considering that debt ratios are below international thresholds. “The ongoing debt assessment shows the country still stands a chance to continue borrowing from within and abroad to finance its development activities and pay off maturing loans using its internal and external revenue on time,” he said. In Uganda, the government is already on the spot over plans to borrow $2 billion in 2020/21 financial year from external lenders to partly finance its $17 billion budget. This will be a slight decline from the $2.6 billion borrowed in this financial year. The Budget Framework Paper shows that with revenues expected to increase marginally to $9.3 billion from $8.8 billion, borrowing will be the only option in plugging the deficit. Kenyan taxpayers are bound to lose $217.2 million in a dam scandal that has hugely exposed the economy to corruption and wastage of public resources. Despite the huge cost of corruption, Kenya is facing a monumental burden of servicing China’s debt for the standard gauge railways following the expiry of the five-year grace period. Loan repayments to China’s Exim Bank will jump from the $303.3 million paid in the year to June 2019 to $698.6 million in the current fiscal period, reflecting a 130 per cent increase. Kenya’s Central Bank Governor Dr Patrick Njoroge is on record accusing the National Treasury of fudging revenue figures, forcing the country on a borrowing spree to plug a rising budget deficit. Speaking after the Monetary Policy Committee meeting in November, he blamed the economic malaise on a lack of commitment in fiscal consolidation. “There is lack of a long-term strategy on how to manage the economy because governments are focused on implementing the budget with debt repayment being a major priority. This compromises development funding,” said Ken Gichinga, chief economist at Mentoria Economics. He, however, added that across the region, a proactive stance by central banks to contain inflation, stabilise currencies and guarantee a stable interest rates regime has saved the region from deeper economic problems. In Kenya, that key sectors of the economy are struggling is evident with official data showing that economic growth decelerated to 5.1 per cent in the third quarter of 2019 compared with 6.4 per cent in the same period in 2018. Only Rwanda, which over the past decade has been among the fastest growing economies, is expected to anchor growth in the region expanding at eight per cent from 7.8 per cent.
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