President William Ruto addresses the TICAD9 at the Yokohama City Assembly in Japan
Kenyan President William Ruto has once again criticised the ratings of international financial institutions, claiming that they are responsible for the underdevelopment of the African continent.
In his address during the plenary session of the ongoing 9th Tokyo International Conference on African Development (TICAD9), the President said that African countries have the potential to grow economically if they receive fair support without restrictions.
It has been Ruto’s pet subject at global events where he has argued for reforms of international financial architecture, and especially how African countries are rated for their creditworthiness. To him, poor ratings of the continent mean Africa struggles to get funding to improve its poverty, becoming a vicious cycle of debt because financing becomes expensive.
“The current global credit rating system often overlooks Africa’s unique economic realities, unfairly penalising our countries during periods of global distress. This must change,” President Ruto said at an event, one of several scheduled in Yokohama, at the TICAD9.
He spoke a day after Kenya signed a Statement of Intent on the Samurai Bond, seeking some funding to alleviate debt. The agreement, signed between the National Treasury and Nippon Export and Investment Insurance, marks Kenya’s entry into the Japanese capital markets for a yen-denominated financial instrument issued by foreign governments.
President Ruto described the move as a “leap forward” in Kenya’s strategy of innovative resource mobilisation to fund national development and transformation.
“This engagement underscores our commitment to broadening financing options to accelerate priority projects that will shape Kenya’s economic future,” he said on Wednesday.
On Thursday, he challenged international financial institutions to consider changing their lending policy to match the potential in the region. The President has endorsed the proposal to establish an Africa Credit Rating Agency, which he believes is complemented by reforms in global credit rating systems to address structural inequities.
“Progressive reforms are essential to unlock affordable, predictable, and sustainable financing for development.”
Kenyan President used the opportunity to challenge African leaders to consider improving trading within the region, which he says will unlock several opportunities.
Accordingly, to Mr Ruto, the UN Trade and Development (UNCTAD) states that less than 18 percent of Africa’s exports are traded within the continent, compared to over 60 percent in both Europe and Asia.
“Africa must trade more with itself to unlock the vast potential of our markets, open rivers of opportunity for our people, create wealth, and drive inclusive prosperity,” adding that “By all credible estimates, under the Africa Continental Free Trade Area (AfCFTA), intra-African trade could surge by up to 50 percent by 2035. This would generate immense wealth, create millions of decent jobs, expand opportunities for SMEs, and open new markets for African goods and services.”
He also noted that agriculture remains Africa’s greatest untapped area of prosperity, which he says employs over 60 percent of people and contributes nearly a quarter of GDP.
“This is not a failure of potential, but of investment, infrastructure, and integration. By deploying technology, financing farmers, investing in rural infrastructure, and trading more with ourselves, we can transform agriculture from subsistence into a powerful driver of industrialisation, job creation, and shared prosperity.”
African leaders are looking forward to tapping the Japanese advanced technology to boost development in several sectors, which will be cemented by the approval of a trade bloc between Japan and the African continent.
Japanese Prime Minister Shigeru Ishiba had proposed the establishment of the Economic Region Initiative of the Indian Ocean-Africa, which is expected to accelerate the growth of Africa and the Indian Ocean region.
Meanwhile, Kenya also inked a Letter of Intent and Concept Note with Shionogi & Co Ltd, a Japanese pharmaceutical firm, to accelerate access to Cefiderocol, a vital antibiotic for treating bacterial pneumonia. Supported by the Global Antibiotic Research and Development Foundation, the agreement is meant to improve the supply of the life-saving drug to Kenyan hospitals.
The Kenya Industrial Research and Development Institute (KIRDI) also entered into a Memorandum of Cooperation on Human Resource Development with Japan’s Ministry of Economy, Trade and Industry, aimed at building skills and technology transfer in industrial innovation.
The signing ceremony was held on the sidelines of TICAD 9 in Yokohama City, attended by senior officials from both governments.