Behind Ruto’s Shift: Experts Unveil Reasons for Abandoning Chinese Borrowing
William Ruto has avoided taking a loan from China since assuming the presidency on September 13, 2022.
This is a significant departure from his predecessors Mwai Kibaki and Uhuru Kenyatta, who favored loans from the East.
As opposed to previous heads of state, President Ruto has sought loans from AfriExim Bank, the International Monetary Fund (IMF), and other Western-backed financial institutions.
GossipA2Z spoke with economists Prof. Fred Ogola and Vincent Kimosop about the absence of China from Ruto’s borrowing basket.
Ogola remarked that Ruto avoided China due to geopolitics and the requirement not to betray important allies.
“Ruto was largely supported by the West, so he owes them a partnership,” he stated.
Professor remarked that if the President successfully defends his seat in 2027, he will have the freedom to borrow from China.
“During his second term, he will have greater freedom to borrow from China and other financial institutions, but due to geopolitical constraints, he must currently align himself with the West.
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“The West is confident in their support, and Ruto cannot risk sanctions if he violates earlier agreements,” he claimed, alleging that Ruto was repaying the West for the support it provided during his campaign for the presidency.
Kimosop, on the other hand, remarked that Ruto’s decision to turn to the West did not necessarily indicate that he was abandoning the East.
He explained that Ruto was doing what was economically best for the country and that this would fluctuate depending on the circumstances.
“The President considers the optimal course of action based on the circumstances at hand.
“Many loans taken by the previous administration are maturing this year (2023), so it would be prudent for the president to seek concessional loans with longer maturities,” Kimosop explained.
He explained that it was the only way to manage the country’s enormous foreign debt, which has had a significant impact on revenue collection.
Chris Kiptoo, principal secretary of the Treasury, disclosed Kenya’s debt to be Ksh9.6 trillion while appearing before the Public Debt and Privatization Committee.
To reduce this amount, Kiptoo announced that Ksh607.1 billion would be used to settle a portion of the debt during the 2023/2024 fiscal year.
The spokesperson added that once Kenya’s financial situation improved, the government would continue to seek loans from China.
“China continues to be one of our most important trading partners, and the President cannot isolate. In terms of financial assistance, the West is currently the best option,” he explained.
Behind Ruto’s Shift: Experts Unveil Reasons for Abandoning Chinese Borrowing
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