Ruto in New York Times piece asks for up to 20-year moratorium on repayment of foreign debt
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President Ruto proposed a 10-20-year moratorium on interest payment on foreign debt for Kenya and other third-world countries
President Ruto proposed a 10-20-year moratorium on interest payment on foreign debt for Kenya and other third-world countries.
In an opinion piece he penned for the New York Times, Ruto made a recommendation, arguing that the nation is being hamstrung by the excessive interest rates demanded by international financial institutions.
President Ruto co-wrote the New York Times piece with Akinwumi Adesina, the President of the African Development Bank, Moussa Faki the Chairperson of the African Union Commission, and Patrick Verkooijen the Chief Executive Officer of The Rotterdam-based Global Center on Adaptation.
The four estimate that by 2023, Africa will require $60 billion (Ksh8.9 trillion) to pay off its foreign debts.
At the same time, the African leaders revealed that the continent will use another $50 billion (Ksh7.4 trillion) to mitigate the adverse effects of climate change.
“Africa urgently needs a pause in debt repayments so that it can prepare for a world of ever-greater climate extremes,” the leaders said while justifying their calls for a moratorium.
In the opinion post, Ruto questioned why, at a time when the region is struggling to pay its foreign debt, the West is so strident in urging Africa to invest in climate resilience initiatives.
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The leaders also noted that since 2020, during the worldwide pandemic, when the majority of poor countries borrowed significantly to maintain their economy, Africa’s debt has increased dramatically.
“We cannot fix the climate issue unless we fix the debt issue,” the piece co-authored by Ruto read in part.
Borrowing from Wildlife Conservation Trust Fund Regulations 2023, Ruto further proposed a debt-for-nature swap model as a way of reducing foreign debt.
This entails global lending institutions forgiving Kenya part of its debt and in exchange, the country upscaling its environmental conservation efforts.
Ruto urged the World Bank and the International Monetary Fund (IMF) to consider the proposals outlined in the opinion piece.
However, the opinion piece did not mention China, despite Kenya being heavily indebted to the country.
Among African nations, Kenya ranks third in terms of debt owed to China, standing at Ksh1 trillion as of June 2023. Angola holds the top position with Ksh3.7 trillion in debt, followed by Ethiopia at Ksh1.08 trillion.
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