Summit billions, little relief: economist questions Africa Forward gains

Economist XN Iraki. [Screen grab]

Kenya may leave the Africa Forward Summit with political gains for its leaders but little relief for struggling households, economist XN Iraki has warned.

Speaking on Spice FM's The Situation Room on Wednesday, May 13,  Iraki assessed the two-day summit co-hosted by President William Ruto and French President Emmanuel Macron, which closed with Macron claiming it had mobilised €23 billion (about Sh3.5 trillion) in investments across Africa.

Iraki said Kenya's negotiating position at the summit reflected France's need for new allies on the continent more than Kenya's own strength.

"The moment we found that the French can be of help to us, we bombarded them with many requests, and because they have vested interests, they are more accommodating," said Iraki.

France has faced setbacks in West Africa, where military-led governments have expelled French troops and cut commercial ties with Paris, pushing it to seek partnerships in English-speaking nations.

Iraki said that the backdrop shaped France's approach in Nairobi.

"I think the French have come to compete with the people who are deeply entrenched here," noted Iraki.

He said both Ruto and Macron used the summit to shift attention from domestic pressures rather than deliver structural economic change.

"The best way of solving an economic crisis as a politician is to deflect it. Both President Macron and President Ruto are in a very similar situation. They have internal problems. If you can externalise that, it will deflect a lot of pressure," observed Iraki.

On Kenya's fiscal position, Iraki said tax pressure, ballooning budgets and reliance on external credit remained unresolved.

"If we dealt with corruption mercilessly and without favouritism, I am sure by the end of this year we would not need any money from the IMF," added Iraki.

He said budget cycles were being driven by electoral considerations ahead of the 2027 general election.

"With these big budgets being made, someone has 2027 in mind. If we stop making budgets from the eyes of politics and instead look at it from the eyes of economics, we are going to come up with budgets that will take care of the common mwananchi and are intergenerational," warned Iraki.

On credit access, African leaders at the summit pressed for reforms to reduce borrowing costs, with the United Nations Secretary-General noting that African countries pay twice the borrowing rates of advanced economies.

"The people of this country want easy access to credit. There has been a big push since President Ruto came to power for a new global financial architecture," said Iraki.

Iraki said the summit served Ruto's political interests, reinforcing his Pan-African standing ahead of 2027.

"President Ruto still believes that he has Pan-African credentials. For the purpose of politics, I think this Africa Forward Summit was good for President Ruto," noted Iraki.

Ruto and Macron are expected to present the summit's declaration on financial architecture reform at the G7 meeting next month in France.