Why Ruto has shield away from China loans
3 min read
Experts explain why Ruto stopped taking China loans, instead shifting to Western-backed financial institutions
Experts explain why Ruto stopped taking China loans, instead shifting to Western-backed financial institutions.
William Ruto has refrained from taking a loan from China since assuming office on September 13, 2022.
This is a significant change in contrast to his predecessors Mwai Kibaki and Uhuru Kenyatta, who chose the East for loans.
In contrast to previous heads of state, President Ruto has turned to the International Monetary Fund (IMF), AfriExim Bank, and other Western-backed financial institutions for financing.
Speaking to local media, economists Prof Fred Ogola and Vincent Kimosop explained why China was conspicuously missing in Ruto’s borrowing basket.
Ogola remarked that Ruto was avoiding China due to geopolitics and the need not to betray key allies.
“Ruto was largely backed by the West and so, he must repay that by partnering with them,” he alleged.
The Professor noted that the President, however, will have the freedom to borrow from China should he successfully defend his seat in 2027.
“In his second term, he will be freer to borrow from China and other financial institutions but currently, due to geopolitics, he must align with the West.
“The West is bullish in terms of their support and Ruto cannot risk sanctions should he negate from earlier understanding,” he stated alleging that Ruto was repaying the West for the support accorded during his quest for the presidency.
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Kimosop, on the other hand, remarked that Ruto turning to the West did not necessarily mean he was abandoning the East.
He explained that Ruto was doing what was best for the country economically and that would periodically change depending on factors at play.
“The President looks at the best alternative depending on the current situation.
“We have a lot of loans taken by the former administration maturing this year (2023) and it is only prudent for the President to seek concessional loans which will take a longer time to mature,” Kimosop explained.
He explained that it was the only way that the country could manage the huge foreign debt which has immensely affected the country’s revenue collection.
Currently, Kenya has a debt totaling Ksh9.6 trillion according to Treasury Principal Secretary, Chris Kiptoo.
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