President William Ruto on Thursday continued with his bullish take on the West and the Breton Wood institutions in Europe, insisting that its relationship with Africa must shift.
In a round table meeting during the Global Financial Pact Summit in Paris, France, the President called for re-engineering of the engagement between the West, and the international financial institutions to make them more responsive to the needs of Africa.
Ruto shared a podium with France President Emmanuel Macron, International Monetary Fund Managing Director Kristalina Georgieva and President of the World Bank Group Ajay Banga in the ongoing New Global Financial Pact Summit in Paris.
He said Africa can no longer be seen as just a continent that needs help but as a partner, adding that the globe cannot continue talking normally when things are not going forward.
At one point, there was a back-and-forth exchange between Ruto and President Macron as the president insisted things had to be done differently.
President Ruto said new financial order will help the world overcome poverty and climate change noting that the financial architecture must be of equals.
He 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 global financial model where power is not in the hands of a few," he added that move will ensure "we all have fair access to resources".
Echoing President Ruto's call for a review of the global financial system, President Macron noted that a bold and targeted approach can transform the world.
He said it is also time debt sustainability was integrated with 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," said Macron.
He called for reconditioning of the World Bank and the IMF on how they operate vis-a-vis the realities at the grassroots.
Global common good
Ruto said the crux of the problem of the multilateral financial system, and particularly the multilateral
development banks is that they are shareholder institutions.
"Shareholder power is exercised in the national interest. The global common good is secondary. Moreover, the distribution of shareholder power is highly unequal. The borrowing countries also do so to pursue their national interest. No country would borrow to pay for public good at its own expense," said Ruto.
He noted the $100 billion per year pledge to developing countries remains unfulfilled, because it requires countries to sacrifice their national interest.
He noted that many African countries are struggling with debt and all indications were there was no more headroom for new debt.
"Indeed, we are in what is referred to these days as fiscal consolidation mode. I do recognise that the reform agenda calls for action on this front, to restore debt sustainability. But we have to acknowledge that this will take time. If we take HIPC (Highly Indebted Poor Country debt initiative) as the benchmark and work to improve on that, we are talking five years at best before we can start to see meaningful headrooms for debt.
He said climate change is not waiting and therefore proposed that rather than pursuing emergency liquidity, debt relief and new ODA separately, consideration be given to deploying a substantial portion of the additional money that is proposed to refinance existing debt.
"This will achieve all three objectives at once. Countries will also have immediate liquidity and debt neutral, predictable and flexible resources that will not require appraisals and negotiations for new loans," said Ruto.
Ruto called for a climate finance system or mechanisms with the global common good as its only mandate.
That he said will be insulated from national interests, on the scale commensurate to the challenge and gave undivided attention to climate action specifically.
"It will aso lead to a decarbonisation of the the global economy , adaptation and resilience and
c)protection and regeneration of nature. This is the agenda for the Africa Climate Summit to be held in Nairobi in September. We believe these two agendas should move in tandem," Ruto said.
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.
Earlier, President Ruto held talks with President of Colombia Gustavo Petro where they agreed to explore new areas of cooperation such as trade and agriculture.
