President Ruto asks donors to postpone Kenya’s debt payment plan by 10 years
President William Ruto asked Kenya’s financial donors to postpone the country’s debt repayment schedule by 10 years.
Speaking in France during the Summit for a new Global Financing Pact, President Ruto said this will immediately allow for the resources that would have been use for debt servicing to be used to sort out other immediate issues.
President Ruto also blamed the International Monetary Fund and the World Bank of ‘unfair’ loan deals that have set up Africa to be in debt.
“Multilateral development financing institutions shareholders can no longer be allowed to make certain decisions. So how do we keep the shareholders happy? Let us tell them we will pay our debts. Give us 10 years or 15 years grace period and make the debt a 50 year loan. And we start with not paying the money we are supposed to pay next year. And they give us 10 years,” President Ruto said.
President Ruto said Kenya pays Sh 5 billion dollars annually to service its debts and if it got the grace period, the country could use the money to provide water, electricity and do development; and have money at scale.
“We will still pay our debt, it has just been postponed so the shareholders have no problems and we have immediate money to deal with our situation so we are not doing badly,” he explained.
The Head of State also said Kenya’s expectation out of the summit was how emergency liquidity can be gotten, how additional funds can be gotten based on urgency and scale as well as how to deal with debt that is saddling many developing countries.
President Ruto requested they do not leave the conference until it is agreed upon how the global south can sort out their immediate issues, including no space for any more debt, emergency liquidity based on occurrences such as the pandemic, the war on climate change among other issues.
“The proposal I make is we need to reform the multilateral development financing institutions. The international financial architecture is not sitting pretty. The UN Secretary General said on this podium this morning that there are countries that are paying eight time in interest what the rest are paying. He was actually referring to those of us in Africa and largely in the global south. That is why our being in debt is not by default,” the President said.
“We were set up by the system to be in debt. If you are paying eight times (more), the chances of you being saddled with debt are eight times higher than the next person. How do we get out of this? Our suggestion is that before we leave here, let us have a consensus on a win-win,” he added.
Kenya currently has a public debt of Sh9.4 trillion. According to the World Bank, the debt stands at 67 per cent of the GDP, and together with the IMF loan rates, the country is facing a major debt crisis.