Begging money again!
Kenya has now spoken at the United Nations General Assembly. President William Ruto said, “Africa does not come to plead.” But when the speech turned to money, these were his requests to the international financial system:
1. Make borrowing cheaper for developing countries: Ruto complained that developing countries borrow at rates “two to four times higher, on average, than developed nations.”
“The countries that most need capital frequently pay the highest price to obtain it.”
2. Multilateral development banks should lend us more money and for longer periods: He called for a significant expansion in development financing.
“Multilateral development banks that lend more, lend longer, and mobilize private capital at scale.”
3. Give us financial guarantees to reduce borrowing costs: He called for international mechanisms that would absorb some of the financial risk associated with investing in developing countries.
“Guarantees and risk-sharing instruments that reduce the cost of viable investments.”
4. Give us greater access to long-term financing: He argued that developing countries should not have to finance major infrastructure projects using expensive short-term borrowing.
“We need greater access to long-term and local currency finance.”
5. Change the way Africa’s credit risk is assessed: Ruto argued that international credit ratings make African borrowing unnecessarily expensive.
“Capital must price risk. It must not price prejudice.”
He said UNDP estimates that subjectivity in sovereign credit ratings has cost African countries approximately $75 billion through excessive interest and foregone lending.
6. Reform the international financial architecture: His broader demand was for a global financing system in which developing countries can obtain capital more cheaply and on better terms.
“Reform of the international financial architecture must therefore begin with the cost and availability of capital.”
7. Give Africa greater influence over the institutions controlling global finance: Ruto argued that Africa carries financial obligations under a system in which it has insufficient influence.
“We cannot carry substantial obligations under a system while remaining marginal in shaping its rules.”
8. Debt payments are taking money away from schools and hospitals: He argued that the present financing system forces developing countries to choose between creditors and essential public services.
“The hospital competes with the creditor, the classroom competes with debt service, and too often the creditor, debt service, is paid first.”
So yes, President Ruto explicitly declared:
“Africa does not come to plead. We come with a proposal.”
But the financial portion of that proposal still contained clear requests to the international system: lend more, lend longer, reduce borrowing costs, provide guarantees, expand long-term financing, reform credit-risk assessment and give Africa greater influence over global financial institutions.
Whether one calls that begging, negotiation, advocacy, or demanding financial reform, those were the requests he placed before the United Nations.
Prof.
-Tapang Ivo Tanku