• On average, developing countries are paying at least five times as much as advanced economies to borrow from financial markets.
• Ruto told delegates at the Africa Climate Summit that there is an opportunity for the borrowing model to be finetuned to be favourable to all.
Image: PSC
President William Ruto on Tuesday resorted to using a Kalenjin saying in trying to explain why Africa is rooting for a new global climate financing architecture.
In his address on the second day of the Africa Climate Summit at KICC, Nairobi, Ruto said debt distress, worsened by the prevailing climate crisis, has impoverished Africa.
This poor state of affairs, he said, needs to change by having a financing model that does not sink the continent deeper into poverty, a worse-off state than debt.
"There was a phrase that 'Kaigai kobarin besen kosir kobarin banan'," the President said.
He said besen means debt while banan means poverty.
"So it is said in this community that if you must die, it is better to die of debt than to die of poverty because you are dying anyway," Ruto said.
In contextualising the phrase in relation to the financing model, the President said Africa as a whole does not want to die of debts, but neither is it readying itself to die of poverty.
Ruto said it's on leveraging on this unfavourable outcome that there needs to be a conversation with multilateral credit lenders on the need to remodel concessional financing to finance African economies without punishing the continent.
"And when we make this proposition, we have tremendous respect for our multilateral development banks. They are doing their best, we have the best of respect for them," he said.
Ruto has been vocal about pushing for inequity in the international financial system, one that would see Africa pair equal interests on loans as more developed economies.
During the New Global Pact Summit in France on June 22, Ruto discouraged the control of resources by the International Monetary Fund (IMF) and World Bank whose rules he said are unfavourable to Africa.
He said he was not pushing for a system that favours only Africa, but one that is fair to all countries globally.
“We do not want anything for free, we want another organization of equals where you have as much say because you pay as much as we do because we also pay. You will pay more eventually because you have a bigger economy, we will pay commensurate to our economy," he said.
On average, developing countries are paying at least five times as much as advanced economies to borrow from financial markets.
Ruto told delegates at the Africa Climate Summit that there is an opportunity for the borrowing model to be finetuned to be favourable to all.
"We need to explore the SDR - Special Drawing Rights window," he said.
The SDR is an international reserve asset, created by the IMF in 1969, to supplement its member countries' official reserves.
In 2021, G7 countries (and later affirmed by the G20) committed to channel US$100 billion (14.59 trillion) of their SDRs (or equivalent contributions) to countries most in need, including in Africa.
Ruto said the SDR window needs to be such that needy countries are prioritised recipients of the funding.
"Let those who need the resources get, not those who don't. In the last experience, those who did not need the resources got more than those who needed the resources. We need to have a paradigm shift this time round," he said.
The Africa Climate Summit will end on Wednesday, September 6.
The Africa Climate Summit which is running parallel to the conference will, however, continue until September 8.
Over 15,000 delegates are attending the conference at the Kenyatta International Conference Centre, Nairobi.
Among them are at least 24 heads of state and government.