President William Ruto has argued that the current debt repayment policies need to be restructured because they are burdening East African nations.
Speaking on Tuesday at the start of the third session of the 5th East African Legislative Assembly (EALA) in Parliament, Ruto stated that the short debt maturity period is one of the main reasons why so many nations are having debt problems.
According to Ruto, the extension will give countries enough time to mobilize resources for development and carry out development without being constrained by the need to repay this debt, enabling strong and effective economic transformation in the region.
"Extend the grace period for loans for development from three to perhaps ten years," he continued. Instead of 15 years, we ought to extend the debt for development resources to 40 or 50 years."
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Mr. Ruto continued his criticism of East African countries' unfair credit ratings, claiming that this prevents them from having an equal chance at obtaining sufficient funding.
"We need to have a conversation about credit rating agencies and a conversation about risk assessment because there is perceived risk that becomes larger than real risk," Ruto stated.
"The perceived risk is then pushed by certain quotas to make Africa uncompetitive."
A credit rating is an assessment by a credit agency that describes a country's or entity's willingness and ability to pay back its debts by the deadlines set forth and how likely it is that a debtor will default.
Therefore, Ruto assigned the Assembly the task of analyzing the array of opportunities and ways in which it can supplement efforts at the national and regional levels to mobilize support for and increase funding for the regional integration agenda.
"I challenge you to apply your deliberative bandwidth to the forthcoming World Bank Group’s International Development Association (IDA) Summit."
