President William Ruto on Thursday called for the reform of the international credit rating and debt sustainability systems.
The Head of State, who spoke during a meeting on the Belt and Road Initiative summit in Beijing, China, revealed that the international financial system was unjust to many African countries including Kenya.
According to Ruto, the unjust international financial system had immensely slowed down the growth and development of most nations located in the far Global South.
He thus urged China to work jointly with African nations to help restructure their debts and incorporate longer grace periods.
President Ruto's plea comes a month after Moody's, a global credit ratings agency downgraded Kenya's ability to access external loans, citing the government's inability to deal with bulging debt.
Moody's downgraded the country's credit ratings to "Caa1" from "B3" and projected that Kenya's debt affordability to remain weaker for longer.
According to the credit rating agency, the government's decision to withdraw the Finance Bill and instead rely on budget cuts to reduce the fiscal deficit could cause implications for Kenya's financing needs.
"The negative outlook reflects downside risks related to government liquidity," read part of a statement by the credit rating agency.
"Slower fiscal consolidation would risk constraining external funding options even more, including diminishing support from multilateral creditors which have been the largest source of external financing," the statement added.
A fortnight later, another global credit ratings agency S&P downgraded Kenya's rating to "B-" from "B," citing the repeal of the Finance Bill 2024 slowed the country's fiscal consolidation.
"The downgrade reflects our view that Kenya's medium-term fiscal and debt outlook will deteriorate following the government's decision to rescind all tax measures proposed under the 2024/2025 Finance Bill," S&P said in a statement.
Meanwhile, during the summit in China, Ruto also called on the stakeholders to double their contribution to the World Bank’s International Development Association (IDA) to help countries such as Kenya access loans at low interest rates.
“This will enable more African countries to access concessional funding. It will support economies that are heavily affected,” Ruto commented.
“I urge all my colleagues to participate in this endeavour to position Africa’s perspective and ideas appropriately in global discourse,” he added.
He went ahead to commend the cooperation between China and African states on transformative programmes, stating Africa needed a robust foundation to achieve a radical turnaround.
According to him, the reforms would enhance Africa’s collective capacity to tackle complex global challenges such as unemployment, poverty, climate change, inequality and political instability.
