{"id":117790,"date":"2024-04-29T21:23:37","date_gmt":"2024-04-29T21:23:37","guid":{"rendered":"https:\/\/www.africa-press.net\/kenya\/all-news\/concessional-loan-haven-for-african-states-ruto"},"modified":"2024-04-29T22:09:17","modified_gmt":"2024-04-29T22:09:17","slug":"concessional-loan-haven-for-african-states-ruto","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/kenya\/all-news\/concessional-loan-haven-for-african-states-ruto","title":{"rendered":"Concessional loan, haven for African states – Ruto"},"content":{"rendered":"

Africa-Press – Kenya. <\/strong><\/span>High-interest rates on external loans have caused African countries unsustainable sovereign debt, complicated refinancing and destabilized currencies, according to President William Ruto.<\/p>\n

As a result, African nations pay interest rates up to five times higher than the typical lending rates.<\/p>\n

“This year, the situation has worsened, developing countries are now net contributors to the global economy, contrary to expectations of receiving net inflows,” Ruto said.<\/p>\n

“Projections for 2024 show a net outflow of $74 billion (Sh9.8 trillion) from IDA countries to donor nations, while net financial transfers to developing countries have plummeted from $225 billion (Sh30 trillion) in 2014, to a low of $51 billion (Sh6.8 trillion) in 2022.”<\/p>\n

He was speaking during opening of the International Development Association (IDA 21) summit on Monday in Nairobi.<\/p>\n

He noted that the costly borrowing makes sustainable growth elusive for African nations as more funds is allocated to debt service than to crucial sectors like education, health and social protection.<\/p>\n

“This financial strain was prevalent in two-thirds of African countries even before the pandemic struck. Notably, in 2020, one in every four Sub-Saharan African countries dedicated over 17 per cent of its public revenue solely to interest payments,” Ruto added.<\/p>\n

The IMF reports also reveal that that Sub-Saharan Africa’s ratio of interest payments to revenue has more than doubled in a decade, reaching nearly four times that of advanced economies by the end of 2022.<\/p>\n

As a result, over half of IDA recipients face debt distress or are at high risk.<\/p>\n

Its on this basis that President Ruto commended and rooted for concessional type of loaning such as one offered by IDA.<\/p>\n

He said the facility has remained to be the most dependable source of patient capital for African countries, with every dollar of donor financing enabling an additional $3.5 in capital market leverage to amplify development impacts.<\/p>\n

He thus called for further capital injection into the facility to support the emerging economies.<\/p>\n

This is concurred by the G20 Independent Expert Group which recommends tripling IDA’s financing capacity to $279 billion (Sh37.2 trillion) by 2030, while maintaining the essential concessional nature of its financing.<\/p>\n

As a cornerstone of financing for Africa, IDA has directed 75 per cent of its total commitments, nearly $26 billion (Sh3.5 trillion) to Africa in the last fiscal year, with African nations comprising eight of IDA’s top ten borrowers.<\/p>\n

IDA stands out for its rapid and decisive action during crises, distinguishing itself from other funding sources.<\/p>\n

Its demand-driven programs, combined with concessional loans of 40 to 50 years, empower borrowing nations to pursue sustainable, long-term development strategies.<\/p>\n

For More News And Analysis About Kenya<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Kenya. High-interest rates on external loans have caused African countries unsustainable sovereign debt, complicated refinancing and destabilized currencies, according to President William Ruto. As a result, African nations pay interest rates up to five times higher than the typical lending rates. “This year, the situation has worsened, developing countries are now net contributors […]<\/p>\n","protected":false},"author":84,"featured_media":117789,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,7,12,7204],"tags":[6857,7003,544],"class_list":["post-117790","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-head-lines","category-policy","category-to-homepage","tag-africa-press","tag-africa-press-kenya","tag-kenya"],"yoast_head":"\nConcessional loan, haven for African states - Ruto - kenya<\/title>\n<meta name=\"description\" content=\"High-interest rates on external loans have caused African countries unsustainable sovereign debt, complicated refinancin ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/kenya\/all-news\/concessional-loan-haven-for-african-states-ruto\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Concessional loan, haven for African states - 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