Inside William Ruto's diplomatic coup amid local economic, political turmoil

President William Ruto with with Chancellor of Germany Olaf Scholz at State House, Nairobi. [PCS] Battered by a perfect storm of political and economic crises at home that threatens his young presidency, William Ruto has embarked on an aggressive charm offensive beyond Kenya's borders. Since taking office 238 days ago following the closely contested elections, President Ruto has sought to win new global allies by broadening Kenya's bilateral economic agenda. And now analysts say that despite the raging economic and political pressure, the President's search for a voice on the global economic stage could be paying off. This is based on the number of high-profile visits to Kenya by global heads of governments and deals in what observers see as an unprecedented show of diplomatic support for the Ruto regime presiding over a country in the jaws of high cost of living burden. The President has engaged in dozens of public meetings as part of an aggressive speed diplomacy and a rush for trade and investment deals, according to a Financial Standard count. The visits appear to have yielded bilateral deals and commitments between Kenya and various countries and multilateral agencies. Dozens of nations have announced support for various economic programmes by the government while looking beyond the political tensions in the country. This comes at a time the new administration is facing mounting pressure to tackle the rising cost of living. Restless Kenyans want the new administration to put measures in place to shield them from the full impact of surging energy and food costs. Opposition leaders led by Raila Odinga have asked the government to bring down the cost of living to cushion ordinary Kenyans who are worst affected. High food and energy prices are among the factors cited as triggers of the Arab Spring uprising a decade ago. The uprisings across the Arab world affected countries including Tunisia, Morocco, Syria, Libya, Egypt and Bahrain. Amidst the unfolding economic crisis and mounting pressure locally, European and Asian powerhouses have moved to back the Ruto administration's push for economic diplomacy. The United States, Japan, South Korea, Germany and global and regional multilateral institutions led by the International Monetary Fund (IMF), World Bank and the African Development Bank have announced backing for economic programmes. The government is betting on these multi-billion-shilling economic support packages to stabilise its finances. Opposition-allied protesters last week took to the streets in several areas of the country to voice anger at the dire economic situation and political deadlock. But in the same week, for instance, the cash-strapped government received a huge financial boost after inking a $3 billion (Sh407 billion) loan deal that will cushion the battered economy against external shocks. The three-year loan financing programme from the African Export-Import Bank (Afreximbank) was signed at State House, Nairobi. The deal that allows Kenya to draw down part of the funds immediately is expected to give the country breathing space amid a financial squeeze that threatens to snowball into a deeper crisis unless arrested early. Afreximbank, which counts 50 African countries among its shareholders, finances and promotes intra- and extra-African trade. Its president, Benedict Oramah, said the loan will help Kenya overcome the "transitory shocks" it is facing amid the Russia-Ukraine crisis, which has caused energy and food disruptions and tightened global credit conditions. "The key goals are to have Kenya manage the transitory shocks that Kenya, African, and indeed the global economies are going through today," said Prof Oramah at a press conference in Nairobi. "We have the energy problems caused by the conflict in Ukraine, also the problem with the challenge of fertiliser, and also the debt crisis and the rising interest rates." The funding will support viable trade and trade-related project ventures in both the private and public sectors. The package will be implemented using several instruments including loans, guarantee facilities, investment banking and advisory services. High inflation, escalating borrowing costs and a strong dollar have made repaying sovereign loans and raising money significantly more expensive for Kenya amid fears of default. The cash shortage has seen the government struggle to pay civil servants and disburse county government obligations. The shilling has weakened against the dollar, piling further pressure on Kenyans enduring a high cost of living that has plunged many into poverty and fuelled political unrest. "This programme is a step forward in our economic recovery agenda and will assist the government following shocks occasioned by the Covid-19 pandemic as well as the global economic crisis," said Ruto after the loan signing. "On agriculture, the facility will be beneficial in bringing down the cost of fertiliser and other essential commodities that are very critical as a way of further bringing down the cost of living in the country." Later in the week, IMF revealed that Kenya stands to get an additional $300 million (Sh41 billion) when the global lender completes its review mission this week. IMF Managing Director Kristalina Georgieva, in a rare generous assessment of a middle-income country by the Bretton Woods institution, insisted that Kenya is an "innocent bystander" and the unfolding economic crisis is not of its own making. "We very strongly support Kenya. We think Kenya is a case of an innocent bystander," she said during a visit in Nairobi. "It has been hit by external shocks, especially by the freeze of access to capital markets but also the shrinking of the fiscal caused by Covid and the war in Ukraine. "But it is acting responsibly, especially with the ambition to bring back the trajectory of increasing domestic revenue mobilisation." In the same week, President Ruto welcomed German Chancellor Olaf Scholz in Nairobi, for the second leg of the European leader's African tour. The chancellor knocked on Kenya's door, seeking clean energy partnerships as Germany searches new partners to wean itself off Russian energy imports following the war in Ukraine. Chancellor Scholz visited a geothermal power plant at Lake Naivasha on Saturday and later promised his country's support in ensuring Kenya's clean energy self-sufficiency. Earlier in April, the United States government announced further support for Kenya after hosting a delegation Washington. "US companies are eager to invest in Kenya's success," said US Secretary of State Antony Blinken. "We're committed to supporting US investment in Kenya - particularly in key sectors like information and communications technologies, agriculture, renewable energy - which will help Kenya achieve its goal of reaching upper-middle income status by 2030 while creating jobs and opportunity for people in both our countries." Ruto got similar commitment when he opened the first EU-Kenya Business Forum in Nairobi. The Business Forum was organised by the European Union in partnership with the Kenya Private Sector Alliance and the European Business Council.

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