Kenya will invest at least Ksh 13.2 billion ($100m) within three years to enhance its shareholding in three continental financial bodies.
Speaking at the African Development Bank (AfDB) Annual Meetings in Nairobi, President William Ruto said the investment will be channeled to AfDB, Afrexim Bank and Trade Development Bank (TDB) to further boost their capacity to support Africa’s development needs and help address climate change.
This comes as calls intensify to reform the global financial architecture that has seen African countries pay premium interest rates for its sovereign bonds floated on the international markets.
“As nations in this continent we must begin to understand that if others had to believe in our institutions, we must believe in them first as the owners,” said President Ruto
The county will further inject Ksh 2.64 billion ($20m) into the African Development Fund (ADF), the concessional window of the AfDB.
According to President Ruto the existing financial architecture has been unjust towards Africa leading to the debt problems currently being faced by many countries, a factor that has consumed the largest share of national resources and starve the development agenda
“We routinely borrow from international markets at rates far above those paid by the rest of the world, often up to 8 to 10 times more. These rates are said to factor in an arbitrary risk profile that is notably not applied when considering mineral extraction, even in areas of active conflict,” he stated.
AfDB president said the reforms in the global financial institutions will ensure the continent’s voice is heard and Africa’s financial needs to address challenges such as climate change are prioritized.
“Today, while Africa’s climate finance needs are in the order of $277 billion annually, the global financial architecture delivers only $30 billion for Africa, a continent that contributes the least to climate change and suffers disproportionately from its negative effects as we have seen in several countries,” said Dr Akinwumi Adesina, AfDB President.
Dr Adesina further called on leaders in the continent to modify global tax regimes that have seen many firms engage in profit shifting and avoidance which deny many developing countries much needed tax revenues for development.
