- President William Ruto of Kenya says resources should neither be controlled by the World Bank nor the International Monetary Fund.
- Africa does not want anything for free. But needs a new financial model where power is not in the hands of the few, says Dr Ruto.
- In Paris, President Ruto says the world cannot continue normally when things are not going forward.
Kenya’s President William Ruto has has called for a new world financing model to tackle poverty and negative effects of climate change. Dr Ruto is advocating for a financial architecture made up of equals. This is his latest call as he continues to emerge as Africa’s most vocal leader since his election in August last year.
According to the leader of East Africa’s top economy, President Ruto said resources should neither be controlled by the World Bank nor the International Monetary Fund. “Africa does not want anything for free. But we need a new financial model where power is not in the hands of the few,” Dr Ruto said.
Such a move will ensure that “we all have fair access to resources”. The globe cannot continue normally when things are not going forward, he explained in Paris.
He was speaking on June 22 during a round-table with his France counterpart Emmanuel Macron, IMF Managing Director Kristalina Georgieva and the President of the World Bank Group, Ajay Banga. The leaders were attending the New Global Financial Pact Summit in Paris.
Echoing President Ruto’s call for a review in the global financial system, President Macron noted that a bold and targeted approach can transform the world.
Africa vulnerable to climate change
Macron noted that is time policymakers integrated debt sustainability and climate vulnerability. “We need a diverse but inclusive discussion on climate change to fix the game. No one should be left behind; not even China,” explained Mr Macron.
The French leader called for the reconditioning of the World Bank and the IMF on how they operate vis-à-vis the realities at the grassroots. “It should be done with speed and urgency.”
An estimated 50 Heads of State, along with international institutions and civil society representatives, are attending the Summit. It aims at developing a new global financial system so that vulnerable countries can be better equipped to combat poverty and climate change.
Finances to tackle climate change in Africa
Africa will require almost $2.8 trillion, or $250 billion a year, to implement its Nationally Determined Contributions (NDCs) between 2020 and 2030. These projections are according to the US-based research organization Climate Policy Initiative. The NDCs represent each nation’s efforts to lower national emissions and prepare for the effects of climate change.
According to data, local and international climate finance flows totaled only $30 billion in Africa in 2020, or just 13% of the required amount. The countries with the biggest annual requirements are South Africa, Ethiopia, Nigeria, and Egypt, which together total almost $151 billion.
According to Climate Policy Initiative, at 66% of all reported needs for climate finance between 2020 and 2030, mitigation makes up the biggest percentage of those needs. Transportation (58%), energy (24%), industry (7%), and agriculture, forestry, and other land use (9%), are the four sectors with the greatest need for mitigation.
Lack of liquid financial markets
FSD Africa points out that addressing climate change will require more than just public investment. This is a result of the size of the investments required and the present and upcoming limitations on public domestic resources in Africa.
According to FSD Africa, investment barriers are typically context-specific but can also be technology-specific, such as performance uncertainty. They can also be policy-specific, such as unclear permitting processes. And bankability-specific, such as off-taker creditworthiness and high debt costs. Investment environment barriers include a lack of liquid financial markets.
Earlier, President Ruto held talks with his Colombia counterpart Gustavo Petro where they agreed to explore cooperation in trade and agriculture. He also discussed Kenya’s Universal Health Coverage plan with the World Health Organisation Director-General Tedros Adhanom. Later, he met Haiti Prime Minister Ariel Henry where issues of mutual interest were at the centre of the discussion table.
Read also: China’s crucial role in Africa’s external debt restructuring arrangements
Working with UAE on COP28
Meanwhile, Kenya and the United Arab Emirates have agreed to partner to make the 28th United Nations Climate Change Conference in December a win-win outcome for all. The President said the pre-conference climate meetings in Paris and Nairobi must help fashion an agreement acceptable to all.
The leaders anticipate favourable outcome for developed and developing countries, emitters and non-emitters, at COP28 in Dubai.
“Climate change is an existential threat to all of us and there is no room for blame games and sideshows. We are looking forward to COP28 as a turning point in climate action,” Dr Ruto said.
The Kenyan leader was speaking when he met Dr Sultan Al-Jaber, the UAE Minister for Industry and Cooperatives who is also the designated President for COP28. Dr Al-Jaber said a united front at COP28 will provide the necessary solutions and “deliver a game-changing COP28”. He said the UAE is seeking to invest in Kenya’s renewable energy resources.
Read also: The Paris Summit for New Global Financing Pact will Benefit Africa
World Economic Forum endorses Kenya’s silicon hub
With Kenya playing a lead role in East Africa, the World Economic Forum (WEF) is keen on establishing a Silicon hub in the country. This as Kenya continues to position itself as the gateway to East and Central Africa while claiming its place at the high table on decisions in the African continent.
Speaking during a meeting with President Ruto in Geneva WEF President Børge Brende said Kenya is the “Silicon Valley of Africa”. Mr Brende said Kenya is a regional and continental leader at a pivotal time when the “G2 (US and China) and Europe” have expressed and shown more interest in Africa.
Read also: Africa’s youth unemployment crisis delaying economic recovery
President Ruto invited the WEF to consider partnering to make Konza Technopolis bigger and better. On his part, Brende invited President Ruto to the WEF in January next year. The Forum is attended by CEOs of key global corporations and is held at Davos, Switzerland. Dr Ruto met Mr Brende in Geneva, Switzerland, after addressing the International Labour Organisation’s World of Work Summit.
Kenya and UNCTAD to champion global trade
Since taking over from his predecessor Uhuru Kenyatta, Dr Ruto has been keen to build strong ties globally. His administration has in a span of 10 months made major inroads in sealing major trade deals. Key among them was the signing of ‘partnership of equals’ trade deal with the European Union this week.
Read also: Inside the Kenya–EU ‘partnership of equals’ trade deal
Kenya and the UN Conference on Trade and Development (UNCTAD) will work together to champion global trade and development issues. Dr Ruto and UNCTAD Secretary-General Rebeca Grynspan have agreed what is said to be a promising path to growth. This, they added, was also key to integration and uplifting developing countries.
According to UNCTAD Secretary-General, the African Report will be released in Nairobi in August. The report will evaluate Kenya’s level of e-commerce among other things. On June 22, President Ruto spoke at the World of Work Summit hosted by the International Labour Organization.
Infrastructure to support e-commerce
President Ruto claims that Kenya has the financial foundation necessary to support e-commerce. The nation is in a unique position to spearhead the rise of e-commerce. “Kenyans are tech-savvy and online financial services have moved the bankable population from a low of about 30 per cent to about 80 per cent,” he said.
This foundation, he noted, had enabled the government to move thousands of services online. His administration has been onboarding public services online. In September last year, only 320 government services were online. “Since then, more than 4,000 services have gone online and will hit the 5,000-mark by the end of June,” the President said.
The government’s programme to install 25,000 WiFi hotspots at markets and urban centres is also on course.
