The truth about bond notes
Terrence T Mutonhori
Govt has $3-4 billion budget. They spend 80-90% of that on salaries and borrow the rest. They have now reached the limit of their borrowing powers. They owe say $16B (not sure but it’s an educated guess) to various foreign institutions which they can’t pay for lack of funds. They further promised in 2000 to happily pay for farm improvements not knowing their value. It turns out that the value of the farm improvements is $40 billion.
They have to make a plan to pay that and the interest on that even conservatively is $400 million a year (which eats up the remainder from their budget leaving nothing for development). So they have zero to develop anything and do anything. The foreign bankers won’t lend them because they obviously can’t pay back.
They have taken all the liquidity from local market and the $6B they extracted from local market meant no money for productive sector thus they make less tax dollars and GDP stops growing. So local market can’t help. This bond note issue is just a way to substitute people’s real dollars with a currency of their creation. Again they will be taking away from productive sector to fund deficit lessening GDP again. It’s just a downward spiral they are perpetuating