The latest from State House shows that the President is very angry with some technical officials at the Finance Ministry conniving with others at the Central Bank to create business opportunities for private money lenders while gradually crippling the commercial banks’ capability to carry on with credit creation which ideally is the way any banking system must thrive. “The President sometime back commissioned some people to do for him a report and the dossier was recently submitted to him. The findings are shocking and big men at both Finance and BoU have been implicated in this syndicate,” said a source. “The report is very comprehensive on how that same syndicate has connived to kill the banking sector. This is how it happens; a lot of unspent money is annually returned from especially local governments. To understand this well one must examine the statements on source and application of funds. At least for the last 5 years, this money is sent bank to the treasury and the big men irregularly entrust it with money lenders who use it lending it around to the private sector and business people to make quick interest on it. They charge 10% interest per month which is lucrative business given that this government money that is being played about. One of these very successful money lenders is a renowned business partner to one of the top technocrats at the Finance Ministry. He is availed this unspent money returned from the districts which he uses to lend to private business entities that can simply not afford borrowing from commercial banks. The dossier shows how the CBR is often manipulated to constrain commercial banks from lending to private sector entities because the manipulated CBR results into the interest rate being very high. The moment would-be private sector borrowers are scared off because of the high interest rate, resulting from the manipulated CBR, the same officials will issue treasury bills and bonds and borrow all the money from the commercial banks on behalf of government. This leaves private sector borrowers with nowhere to go but to borrow from individual money lenders who are proxies of the big men at finance ministry and BoU. Mzee is angry that such big men are busy enriching themselves when the broader economy is collapsing. There are already concerns all this could be deliberate to serve the selfish interest of a very ambitious foreign power in the region.” The source added that the suspected involved of a foreign country in procuring the betrayal by some technocrats at both Finance and BoU partly explains why the President is very angry and could sanction prosecution of implicated technocrats once the investigations are completed.
