President William Ruto is urging for changes in how countries repay their debts, suggesting that the current short repayment periods are causing strain for East African nations.
Speaking at the East African Legislative Assembly (EALA), Ruto emphasized the need for longer repayment timelines to ease the burden on developing countries.
“We need to give countries more time to pay back their debts so they can focus on development,” Ruto stated during the assembly’s session.
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He proposed extending the grace period for borrowed funds meant for development projects from 3 years to 10 years and increasing the overall debt repayment period from the current 15 years to a range of 40 to 50 years.
Ruto believes these adjustments would provide nations with sufficient breathing room to invest in growth without being overwhelmed by debt obligations.
Ruto also highlighted the issue of unfair credit ratings assigned to East African countries, which hinder their ability to secure adequate funding.
He called for a reassessment of how risk is evaluated, suggesting that perceptions often exaggerate the actual risks involved.
“We need to rethink how credit rating agencies assess our countries.
Africa shouldn’t be penalized unfairly,” Ruto emphasized.
Credit ratings, Ruto explained, are assessments by agencies that evaluate a country’s ability to repay its debts and the likelihood of default.
He urged the assembly to delve into these matters further and explore ways to support regional integration efforts.
“I encourage you to focus on discussions at the upcoming World Bank Group’s International Development Association (IDA) Summit,” Ruto urged the assembly, emphasizing the importance of analyzing opportunities to enhance resource mobilization for regional development initiatives.
