President William Ruto has lashed out at global development financiers for what he described as unequal treatment by hitting African countries with higher interest rates on key projects, even as he called for urgent reforms in the global financial system.
Speaking at the opening of the African Energy Forum in Nairobi on Tuesday, President Ruto lamented that countries in the global south are forced to access loans from development financiers at interest rates up to a dozen times higher than those in the global north.
Cash-strapped African countries, including Kenya, rely heavily on funding from global lenders such as the World Bank, the International Monetary Fund (IMF) and the International Finance Corporation (IFC) to build big-ticket development projects, especially in infrastructure and energy, that these states cannot afford to build on their own.
But the Head of State says these global lenders apply different rules to different countries, resulting in poor countries, especially in Africa, that are considered riskier to lend to being slapped with much higher interest rates compared to their wealthy counterparts.
"Those of you who are in development finance know that today some countries are accessing development finance at (interest rates of) 10-12 per cent while others are accessing it at one percent or even 0.5 percent," Dr Ruto said.
President Ruto called for equal access to global development finance at market rates, even as he called for more investors to take up financing to tap Africa's considerable natural resources.
"We are saying that we should have an international financial system that treats everyone equally and does not disadvantage others because of the element of risk."
The head of state put climate change at the centre of his speech at the forum, the first to be held in Africa since its inception in 1998, and reiterated calls for global financiers to tap into renewable energy sources in Africa to reduce emissions.
President Ruto called for equal investment in the continent's energy sector, saying that African nations would provide vast renewable energy and mineral resources, while investors would bring finance and technology, making the participants equal partners.
"For the first time, those of us from the African continent are not going to complain or lament to anyone. We want to have a conversation of equals where the huge renewable energy and mineral resources that we have can be used to deploy hydrogen technology to solve the energy challenge that we have," said Dr Ruto.
"The North can come with technology and financial resources and we can have an outcome where everybody is a winner."
The President reiterated the risk that climate change poses to all countries and called for "a new financing agreement that will enable us all to recognise the existential threat that climate change poses to humanity".
This as he called for an end to the blame game over who is most responsible for climate change and who should play what role in addressing the disasters that mostly poor countries are facing, mainly due to climate change.
"The North is as vulnerable as the South, the emitters are as vulnerable as the non-emitters, so we have to work together, this is not a time for finger pointing and blame games, this is a time to work together on a solution to save our planet, to make sure that we use all the resources that we have," the President said.
"It's not a conversation about aid, loans, debt, it's a conversation about investment where everybody comes with their assets," said Dr Ruto.
At the same time, President Ruto and COP28 President Dr Sultan Al Jaber pledged to work together to "deliver real and tangible results" at the first-ever Africa Climate Summit 2023 and COP28 to be held later this year in Nairobi and Dubai respectively.
President Ruto commended the United Arab Emirates (UAE) and the COP Presidency for their long-standing support for sustainable development and climate action, and reiterated his support for the COP28 leadership team.
Dr Ruto also took the opportunity to welcome Dr Al Jaber in his role as COP28 President, noting the expertise he will bring to the role given his credentials as a leader in energy transition and the expansion of renewable energy around the world.
In a joint statement yesterday, Dr Ruto and Dr Al Jaber launched a joint working group between the Africa Climate Summit and COP28 to focus on just energy transition and unlocking climate finance to accelerate green growth in Africa ahead of the respective summits.
"We are pleased to announce that COP28 and Kenya will join forces to promote action on the necessary tripling of installed renewable energy capacity by 2030. This shared goal requires a global effort to accelerate an equitable energy transition that leaves no one behind," the statement said.