President William Ruto has asked international funding bodies to consider the numerous development needs of African nations during allocations of funds.
While speaking on Thursday, July 20, during the 39th Annual General Meeting of the Trade and Development Bank (TDB), Ruto said that Bretton-Woods system is inadequate and unjust in funding Africa.
“At the International Monetary Fund (IMF), European nations took 160 billion of the 2021 issue of the Special Drawing Rights (SDR), compared to African countries’ cumulative amount of 34 billion. An institutional blueprint which administers development financing this way must be changed urgently,” said Ruto.
Some of the economic burdens that Ruto highlighted in his speech include the COVID-19 pandemic era which led to the closure and disruption of many businesses hence affecting the economy in general.
Additionally, Africa as a whole is experiencing drastic climate changes of unprecedented variety, frequency and magnitude.
He added that African countries end up surviving on debt while trying to overcome the cycle of underdevelopment.
One of Kenya Kwanza administration’s agenda is to operate on the country’s funding instead of depending on international aid and this has been cited as the reason why there is a need to increase taxes.
This move was supported by IMF saying that it is essential in mobilizing critical resources for the cash-strapped government.
IMF recently approved an immediate disbursement of SDR 306.7 million (about $415.4 million; Sh58.7 billion), bringing total disbursements under the arrangements so far to about $2.04 billion (Sh288.5 billion)
“The approval of the financial year 2023-24 Budget and 2023 Finance Act are crucial steps to support ongoing consolidation efforts to reduce debt vulnerabilities while protecting social and development expenditures," said IMF Deputy Managing Director and Acting Chair of the IMF executive board Antoinette Sayeh after approving Kenya's new loan.
The fresh loan deal, however, is expected to subject hard-pressed Kenyans to tougher economic times after the IMF prescribed another dose of its renowned bitter pill of austerity measures.