Inside Ruto’s Upto 20-Year Plan to Delay Foreign Debt Interest Payments
President William Ruto has proposed a ten- to twenty-year moratorium on foreign debt interest payments for Kenya and other third-world nations.
In an op-ed he wrote for the New York Times, Ruto proposed that the country is being hampered by exorbitant interest rates imposed by international lending institutions.
President Ruto co-wrote the New York Times article with Akinwumi Adesina, the President of the African Development Bank, Moussa Faki, the Chair of the African Union Commission, and Patrick Verkooijen, the Chief Executive Officer of The Global Center on Adaptation, situated in Rotterdam.
Africa will require $60 billion (Ksh8.9 trillion) in 2023 to service its foreign debts, according to the four experts.
Concurrently, the African leaders disclosed that the continent will invest an additional $50 billion (Ksh7.4 trillion) to mitigate the negative 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.
Ruto questioned in his opinion piece why the West is so vocal about urging Africa to invest in climate resilience projects when the continent is struggling to service its foreign debt.
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In addition, the leaders noted that Africa’s debt has increased dramatically since the global pandemic of 2020 when the majority of poor countries borrowed extensively to sustain their economies.
“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 means of reducing foreign debt.
This entails international lending institutions alleviating a portion of Kenya’s debt in exchange for the country increasing its environmental protection efforts.
Ruto urged the World Bank and the International Monetary Fund (IMF) to heed the recommendations outlined in the editorial.
Despite Kenya’s significant debt to China, the opinion piece made no mention of the country.
Kenya ranks third among African nations in terms of debt owed to China, with Ksh1 trillion owed to China as of June 2023. The country with the most debt is Angola, with Ksh3.7 trillion, followed by Ethiopia with Ksh1.08 trillion.
Inside Ruto’s Upto 20-Year Plan to Delay Foreign Debt Interest Payments
