Assume the following information was extracted from the Balance of Payments accounts of an African Country.

ITEMSAMOUNTS

MILLIONS

Interest paid on foreign debt19,080

Dividend income on residents960

Private long term offshore investment5,340

Exports28,800

Foreign long-term investment in the country4,578

Deposits in local banks930

Private gifts to foreigners180

Imports41,400

Government donations to foreigners210

Donor aid to residents1,170

Foreign and insurance payments abroad8,550

Tourism earnings by resident hotels936

Sale of government bonds to foreigners4,800

Errors and omissions(1,290)

Private grants to residents258

Use of special drawing rights2,040

Use of credit tranche2, 400

Repatriation of profits by foreigners21,600

Travel abroad4,500

Interest paid to foreigners10,800

Deposits in foreign banks2,400

Interest earned from offshore investments1,800

The ministry of finance Principal Secretary has provided the following additional summaries

CURRENT ACCOUNT (TRADE) CRDRBALANCE

Exports28,800

Imports41,400

+12,600

SERVICE TRADECRDRBALANCE

Dividend income to residents960

Tourism earning by residents936-

Interest from offshore investments 1,800-+3,696

Interest paid on foreign debt19,080

Insurance and freight payments abroad8,550

Repatriation of profits by foreigners21,600

Travel abroad 4,500

Interest paid to foreigners10,800(64,530)

Service trade balance(10,755)

Service and trade balance(73,434)

TRANSFER PAYMENTSCRDRBALANCE

Donor aid to residents1,170-

Private grants to residents258-+1,428

Govnt donations toforeigners210

Private gifts to foreigners180(390 )

Transfers payment balance+1,038

Current a/c balance(72,396)

CAPITAL ACCOUNTCRDRBALANCE

LONG TERM CAPITAL

Foreign long term investment in the country4,578

Sale of government bonds to foreigners4,800+9,378

Private long term offshore investment(5,340)

Long term capital balance +4,038

SHORT TERM CAPITAL

Deposits in local banks 930-

Deposits in foreign banks2,400

Short term capital balance (1,470)

Errors and omissions(1,290)

Capital a/c balance+1,278

Overall balance of payments(71,118)

OFFICIAL SETTLEMENTS A/CCRDRBALANCE

Liabilities to foreign official holders

Use of the credit tranche+2,400

Official reserves

Use of SDRs+2,040

Total +4,440

Use of convertible currencies/Gold+66,678

Official settlements a/c balance+71,118

Required

i.The Country's Principal Secretary has requested you to ascertain whether or not The BoP entries in the summary are correct and to make any necessary corrections (5 Marks)

ii.The principal secretary has requested you to analyze and present a report on the BoP's financial implications to the country. Your report should be supported by financial data from the BoP statement (10 Marks)

iii.What is Kenya's current BoP position, and what are its implications on the country? (5 Marks)