Inside William Ruto's challenge to global financial status quo

President William Ruto has once again challenged the global financial status quo insisting that African countries must be treated as equal partners in economic discussions with development partners.

 The President, while addressing the Africa Forward Summit on Tuesday, said the continent has outgrown the donor aid relationship that has defined Africa's development for decades.

 He described this relationship as an outdated model that is asymmetrical, saying the continent needs a framework that is anchored on investment, industrialisation and mutual cooperation.

 Ruto said the unfairness perpetrated by global multilateral lenders is what has informed Kenya’s and the rest of the continent to boost capital on African financial institutions, in addition to pushing for a continental credit rating agency.

 “The current international financial system remains structurally unequal,” he said.

 The Head of State cited high borrowing costs for African countries, constrained access, and a distorted risk perception that does not reflect the true value of the continent’s economies.

 “This imbalance is neither sustainable nor just. It is one of the principal constraints of Africa’s ability to finance infrastructure, industrialisation and climate adaptation to the scale required,” he said.

 Ruto said Africa should approach negotiations with the rest of the world by virtue of its strength seen in human capital, minerals, fertile land and renewable energy potential.

 “The era in which Africa’s development was principally financed through aid, dependency and unsustainable borrowing must give way to a new paradigm grounded in investment, innovation, domestic resource mobilisation and strategic partnerships built on sovereign equality and mutual benefit,” he said.

 He added: “Africa is not the global problem. What Africa requires is not charity but investment.”

 Ruto did note that while Africa looks outside to fund its development, it has domestic resources – up to Sh520 trillion ($4 trillion) in long-term savings – that can be harnessed for the same.

 “The issue is not liquidity but risk architecture,” he said.

 It is on the sidelines of this summit that Kenya and France inked 11 deals among them the rehabilitation and modernisation of the Sh12.5 billion Nairobi Commuter Rail project that will realise the upgrade of key corridors linking the city to satellite towns of Syokimau, Embakasi, Ruiru and Kikuyu.

 There is also a Sh104 billion agreement to establish a joint venture to develop and finance logistics and port infrastructure, and a cooperation that will see Kenya leverage on France’s knowledge and usage of nuclear energy.

 The latter will support the country’s ambition of generating 10,000 MW.

 Further, the Sh32.5 billion Kipeto Wind Energy Development project also received a boost in the deals so that it can produce additional Sh100MW.

 France, which is a co-convener of the summit alongside Kenya, is being viewed as strategically aligning new allies on the continent with visible strained relationship with francophone nations.

 France President Emmanuel Macron, who has been part of the summit, said his intention during his presidency has been to forge forward looking partnerships with the African countries. This, he said, he has done with Rwanda, Cameroon and Algeria.

 These partnerships are based on co-development and co-investment.

 “Which is built on respect and the fact that Africa has its own agenda,” he insisted.

 He said his plan is not to offer assistance even as he noted of budgetary challenges, saying developed economies need to relook at the relationship with the continent.

 One way is to harness the diaspora community working in those countries who send money back home and find mechanisms to formalise the informal enterprises.

 “It is about time we brought them into the value chain, and to structure your agricultural and industrial sector, so that Africa will no longer be seen as a place for rare earth and other resources to be extracted but rather as a partner,” he said.

 Macron said the sovereignty and dependency African countries are fighting for mimics what was the case with European nations who sought to not look at the United States or China for economic assistance.

 “That is the same challenge Africa has before it. What Africa wants is peace, prosperity and independence,” he said.

 He spoke of how the continent has been sidelined to the extent that it has no permanent seat at the United Nation Security Council (UNSC). He said he is willing to lobby for this to be rectified.

 “What we stand ready to do is just financing that with a re-worked security arrangement which is respectful of the sovereignty of each African country,” he said.

 This was also noted by UN Secretary General Antonio Guterres. He said the global system was designed without Africa, and still largely operates without it, perpetuating century old injustices.

 “A continent of more than 1.5 billion people with no permanent seat in UNSC. Without the voice, representation and the decision-making power it deserves, inside international financial institutions that shape this economy, it is not Africa that loses, but the world,” he said.

 He said the current economic challenges characterised by collapsing official development assistance, budget cuts and countries walking away from their earlier commitments, is a financial crisis that calls for solidarity.

 “The global economy is worsening; multilateralism and collective security is being challenged. In these uncertain contexts our continent must lead. Africa must contribute to global decision,” said African Union Commission Chairman Mahmoud Ali Youssouf.