Inside West Nile

When I say that the government is crowding out the private sector with it's borrowing, please consider this: There is a whole class of people, driven by the likes of my friend @KakandeAlex, considering investing in government bonds over starting a business. The main argument: The risk return profile for the level of effort is much more attractive in government bonds over pretty much any other more active options... I have my views about the risk component of government bonds as you need to have some trust in the budgetary constraints of the current government. That being said, can you blame my dentist, lawyer or friend in the public sector to find this narrative attractive? What's the point of even starting a business if you can put your money to work at 16% per year passively? With this premise, everything trickles down. Why would banks lend to your SME. Lending to government gets them 16%. What's the point of your supplier giving you supplier financing if he can buy a Treasury Bill at 10%? Why would a foreign investment fund lend or invest at a level below the bonds (might as well buy bonds and chill in Zanzibar)? Fix your finances and you'll fix the base rate... PS: There are other issues at play like the high (and perhaps unjust) preceived risk of African countries and global shocks / rates. Ultimately however, if you improve fiscal discipline and your image globally (perceived risk), it should trickle down.... For now, let me go and buy a few bonds...