President William Ruto has called for a revamp of current debt repayment policies, asserting that they are placing undue strain on East African nations.
Speaking during the opening session of the 5th East African Legislative Assembly (EALA) on Tuesday, Ruto highlighted the pressing need to address the issue of short debt maturity terms, which he believes is a significant factor contributing to the region’s debt burden.
Ruto emphasized that extending the tenure of debt repayment would facilitate more robust economic transformation across the region.
“Increasing the grace period for development loans from 3 years to perhaps 10 years would provide nations with the necessary breathing room to mobilize resources for development,” he stated.
Additionally, he proposed extending the overall tenure of development debt from the current 15 years to a range of 40 to 50 years. According to Ruto, this would enable countries to undertake development projects without the constant pressure of imminent debt repayment.
Furthermore, Ruto expressed concerns about the unfair credit ratings assigned to East African nations, which hinder their ability to secure sufficient funding.
“We need to initiate discussions on credit rating agencies and reevaluate risk assessments, as there exists a perceived risk that is often inflated, rendering Africa uncompetitive,” he remarked.
