The current lending system is unequal and punitive because it fails in its mission to give everybody a fair chance, dividing nations into rich ones and those, who are supposed to "look for help," said Kenyan President William Ruto in an interview with a French media outlet.
Speaking on the sidelines of the Summit for a New Global Financing Pact, the Kenyan leader emphasized that as of now, low-income countries are forced to pay eight times more in interest rates than developed states "because they are profiled as risky." He noted that certain global powers are benefitting from this financial ploy.
However, African nations are no longer going to put up with such treatment, the president stated.
"Some people do not want a mechanism where people are equal, they want us to continue this conversation where we are looking for help," Ruto said, stressing: "We do not want to look for help. We want to participate in the solution."
According to Ruto, Africans are tired of this narrative when they are portrayed as "victims of climate change" who are constantly looking for handouts and "complaining." African countries want to be regarded as equals in global finance, and together with developed nations contribute to resolution of crises.
In particular, he noted that instead of development aid, his country is seeking to attract more private investments.
In his call for reforming the International Monetary Fund and World Bank, Ruto also urged international lenders to rethink the management of their debts. He explained that Kenya annually pays $10 billion in debt service, adding that this sum could instead be directed to the development of the nation.
"If we use it instead for development of the country, it will be immediate, it will be big resources and it will have huge impact," Ruto stated.
Elaborating even further on ways to make this idea feasible, he noted Kenya's debt owed to international lenders, such as the IMF and World Bank, should be rescheduled and converted into a 50-year loan facility with a 20-year grace period. In this case, the East African nation will be able to focus on developing its economy, instead of spending its resources on liabilities.
The Kenyan leader also echoed other officials from developing nations, who pointed to the billions of dollars allocated by Western countries to support Ukraine, while falling short on their promises and financial obligations to tackle climate change.
"Ukraine is nothing compared to the problem we face with climate change which poses an existential threat to everybody," the president highlighted.
Ruto underscored that the global community has "to set aside all these other issues," including "the blame game," and jointly focus on addressing the climate change effects. He added that Africa, along with other nations, is ready to pay the world's climate bill.
In early September, Kenya is expected to host the Africa Climate Summit that is aimed at introducing a new climate-compatible vision for the continent and climate finance solutions. The regional meeting will bring together over 10,000 delegates from more than 55 countries.