President William Ruto attended the New Global Financial Pact Summit held in Paris, France. The summit sought to address a a range of objectives, including but not limited to the following:

1. Restoring fiscal space to countries facing short-term difficulties, especially the most indebted countries.
2. Promoting private sector development in low-income countries.
3. Encouraging investment in green infrastructure for the energy transition in emerging and developing countries.
4. Mobilising innovative financing for countries vulnerable to climate change.

President Ruto addressing the audience during a round table with France President  Emmanuel Macron, International Monetary Fund Managing Director Kristalina Georgieva and World Bank Group President Ajay Banga called for a review of the global financial mechanism.

The President in his address was concerned about emergency liquidity and made a proposal for reforming international financial structures such as the World Bank and the International Monetary Fund.  President Ruto called for a consensus on debt restructuring especially for the developing countries, especially the African countries. He requested the Bretton Woods institutions to consider restructuring the debt servicing period for African countries for 50 years with a grace period of 10-15 years. The revised repayment model would ease the pressure on the limited available resources to provide for other critical needs of a country such as development and climate financing. This conformed to the Summit’s objective of simultaneously addressing climate change, biodiversity and development challenges.

He further noted that Kenya recently became an Association country in the International Energy Agency joining the Agency’s long-standing engagement on energy issues in Africa. For Kenya, this means spending USD 9.2 trillion annually to get to net zero by 2050, unfortunately, the President noted that Kenya would be faced with USD 3.5 trillion dollars deficit which would slow the progress of attaining the goal. Urging on the need for consensus on a new global financing mechanism, the President noted that loss and damage Fund was not a sustainable solution. This is because the Funds had conditions that favored national interests over global interests such as climate change actions.

The new global financing pact, the President noted, needed not to have the dividing concepts of the global south vs the global north or developed vs developing countries. He said that it was no longer time for pointing fingers on the emitters and non-emitters as the agenda concerned all nations and the planet. The proposed international funding mechanism would therefore need to include all countries including the developing countries as part of the decision-making process.

The President echoing the Summit theme dubbed ‘How Dare You’ vehemently rejected the idea where funds granted to developing countries had national or shareholding conditions attached to the loan repayment models. He dared the audience for the need for contribution of funds by all countries for equality purposes and inclusivity in decision making. The President noted that his expectations of the Paris Summit was to agree and conclude on a win-win international funding mechanism during the African Climate Action Summit to be held later this year in September.

Additionally, the President rejected the proposal by IMF on Carbon Tax that would require ratification by all countries. The Carbon Tax piggybacked on existing fuel taxes and also integrated into royalties paid by coal mining and oil and gas drilling industries. In the alternative, President Ruto proposed a Carbon Tax that is agreed upon as a treaty where all countries regardless of them being developed or not can pay equal tax to avoid a situation where others pay hefty interest rates compared to others.

The President noted that while developed countries such as European countries were able to lower their gas emissions, poor countries with lack of funds to finance climate action had their gas emissions go up which reversed gains made by the global north. Hence the need for carbon tax and an additional tax on fossil fuels as it was the major contributor of gas emissions.

The new global financing pact is timely as indeed when the Bretton Woods institutions were established, there were only 44 delegates. It’s high time that all countries agree on international funding mechanism that integrates climate vulnerability, debt sustainability and development as no country would be spared from the drastic climate changes.