Ruto pressures world economic power hubs to restructure debt repayment by African countries
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Ruto pressures foreign economic power hubs to restructure debt repayment by African countries amid hard economic times
Ruto pressures foreign economic power hubs to restructure debt repayment by African countries amid hard economic times.
On June 22, President William Ruto proposed a new law allowing Kenya and other African countries to restructure their debt and lessen the strain on austerity measures in the midst of a challenging economic climate.
Ruto claimed that debt restructuring will enable Kenya and other African governments to uphold their financial obligations during a roundtable discussion in Paris, France.
Creditors were urged to approve a new rule giving nations a grace period of between 10 and 20 years before their debts mature and 50 years to pay them off.
The President claims that his administration will save close to Ksh1.4 trillion (USD 10 billion) annually thanks to the new debt repayment scheme.
Part of the saved amount will be diverted to boost other sectors of the economy and reduce overdependence on loans to fund development projects.
“Let us agree that the money we are supposed to pay for the next 10 years as debt repayment be converted into a new law that is a 50-year loan with a 20-year grace period so that you don’t have a problem with rating.
“Kenya, for example, pays Ksh1.4 trillion (USD 10 billion) to service its debt. If I had Ksh1.4 trillion (USD 10 billion) for development every year instead of paying debt, it would make a huge difference,” Ruto stated.
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Ruto also asked the World Bank nor the International Monetary Fund to lessen their monetary policies and allow African countries to enjoy resources.
“Africa does not want anything for free. But we need a new financial model where power is not in the hands of the few,” Ruto stated.
According to the National Treasury, Kenya’s debt stood at Ksh9.6 trillion as of March 30, 2023.
Out of the Ksh9.6 trillion, credit owed to external creditors totaled Ksh5 trillion, with local lenders accounting for the balance.
While appearing before the Public Debt and Privatization Committee, Treasury Principal Secretary, Chris Kiptoo disclosed that the government had allocated Ksh607.1 billion to repay debt in President William Ruto’s first budget.
Kenya was projected to spend Ksh3.6 trillion in the 2023/24 financial year.
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