President Uhuru Kenyatta on Thursday, July 16, urged for the cancellation of debts owed by African countries in the development of a joint European Union and Africa Covid-19 response strategy.
Speaking at State House, Nairobi, during a virtual conference of European and African leaders on the proposed establishment of the Africa-Mediterranean-Europe (AME) Foundation, Uhuru stated that the cancellation of debts should be among the interventions taken in cushioning African countries during the pandemic.
President Kenyatta expressed his support for the establishment of the Foundation noting that the initiative would help inject new ideas needed to scale up collaboration between the three regions while addressing emerging global challenges.
He further conveyed that the foundation should be structured to be a robust platform for the promotion multilateralism and inclusivity.
"In this context of inclusivity, the Foundation should also recognise the critical role of the private sector, the academia and civil society," the President added.
The virtual meeting was addressed by Presidents Macky Sall (Senegal), Issoufou Mahamadou (Niger), Mohamed Ould Ghazouni (Mauritania) and Roch Mach Kabore (Burkina Faso) who were in agreement that the institution would help address the changes happening on the African continent.
Uhuru had earlier on raised concern over the debt levels of developing countries during a virtual summit on June 3 of the Organization of the African, Caribbean and Pacific States (OACPS).
Kenyatta identified the growing debt burden and existing economic sanctions among its members as challenges that are aggravating the negative effects of the Covid-19 pandemic.
Kenya's credit rating has significantly lowered by credit rating firms. On July 14, S&P Global Ratings, a US credit rating agency revised Kenya's outlook to negative from stable detailing that the Coronavirus pandemic will slow down the country's Gross Domestic Product (GDP) growth in 2020, with its effects lasting towards the end of 2023.
Two months earlier, Moody's, a US credit rating agency warned Kenya against taking more loans. Moody's revised Kenya's credit rating outlook to negative, signalling that its next review could rate Kenya much lower if the situation prevails.
It also warned that the rating meant Kenya was flagged as a country that can easily default on loans, which may have an impact on Kenya's borrowing ability moving forward.
The low ratings came even as Kenya rejected debt relief measure by G20 countries in April 2020, where the nations agreed to temporarily waive loan repayments by lesser economies.
Treasury Cabinet Secretary Ukur Yatani in an interview argued that the debt relief may negatively impact the country's credit rating.
