- President Joe Biden and Kenyan President William Ruto want economies around the world to take steps to reduce the enormous debt burden that is crushing many developing countries.
- Ruto is visiting Washington as Biden makes his case to African countries that the United States can be a better partner than China, which has increased its presence on the continent.
- Biden and Ruto will hold formal talks and a joint press conference on Thursday before a state dinner.
President Joe Biden and Kenyan President William Ruto are using the first state visit to the United States by an African leader in more than 15 years to call on economies around the world to take action to reduce the enormous burden of the debt that is crushing Kenya and other developing countries.
The call to action, dubbed the Nairobi-Washington Vision, comes as Biden appeals to African countries so the United States can be a better partner than its economic rival China. Beijing has stepped up its investments on the continent – often with high-interest loans and other tough financing conditions.
Biden and Ruto want creditor countries to reduce financing barriers for developing countries that are constrained by heavy debt burdens. They also call on international financial institutions to coordinate debt relief and support through banks and multilateral institutions offering better financing conditions.
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“Together, we will call on the international community to rally around these elements to support high-ambition countries with high-ambition financial support,” the White House said in a fact sheet detailing the effort.
The White House also announced $250 million in grants to the International Development Association, part of the World Bank, to help poor countries facing crises.
Separately, a $1.2 trillion government funding bill passed by Congress in March authorizes the United States to lend up to $21 billion to an International Monetary Fund trust fund for debt reduction. Poverty and Growth, which provides zero-interest loans to support low-income countries in their stabilization efforts. their economies, boost growth and improve debt sustainability. This financing should be made available to the IMF in the coming weeks.
President Joe Biden welcomes Kenyan President William Ruto to the White House in Washington on May 22, 2024. (AP Photo/Susan Walsh)
Biden and Ruto are expected to hold formal talks and a joint news conference on Thursday before a state dinner at a pavilion on the South Lawn of the White House.
An Associated Press analysis of a dozen countries most indebted to China – including Pakistan, Kenya, Zambia and Laos – found that the debt is consuming an ever-increasing amount of tax revenue needed to maintain schools open, provide electricity and pay for food and fuel.
Behind the scenes is China’s reluctance to cancel its debt and its extreme secrecy about how much money it has lent and on what terms, which has prevented other major lenders from stepping in to help.
Kenya’s debt-to-GDP ratio exceeds 70%, most of which is owed to China. Ratings agency Fitch estimates that Kenya will spend almost a third of its public revenue this year on interest payments alone.
Ruto said on Wednesday that his talks with Biden will focus on “how we can have a fairer international financial system where all countries are treated equally”.
Biden also informed Congress on Thursday that he would designate Kenya as a major non-NATO ally, according to the White House.
The designation, while largely symbolic, reflects how Kenya has evolved from a regional partner that has long cooperated with U.S. counterterrorism operations on the continent to a major global influence — even extending its reach into the Western Hemisphere. Kenya will be the first country in sub-Saharan Africa to receive this status.
Kenya is expected to soon deploy 1,000 police officers to Haiti to help quell the gang violence that has ravaged the Caribbean country for months. The Biden administration has praised Kenya for intervening in Haiti when so few other countries have done so. Haiti is the poorest country in the Western Hemisphere and has been mired in political instability and natural disasters for decades.
The United States has pledged $300 million in financial aid for the Haiti mission, which will also include support from the Bahamas, Barbados, Benin, Chad and Bangladesh. Ruto is expected to discuss the upcoming mission with Biden, Defense Secretary Lloyd Austin and other officials during his talks in Washington.
Ruto arrived in Washington on Wednesday and began his three-day state visit by meeting with Biden and technology executives from Silicon Valley and Kenya’s growing technology sector, known as Silicon Savannah.
Administration officials said several private sector investments are expected to be announced during the visit. The Kenyan president told tech executives that Kenya – and Africa in general – has a young and innovative population “hungry for opportunity”.
“I think this is a historic moment to explore investment opportunities between Kenya and the United States,” Ruto said.
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Biden brought together dozens of African leaders in Washington in December 2022 to make the case that the United States under his leadership was “all in” on Africa’s future. He promised billions of dollars in government funding and private investment on the continent in health, infrastructure, business and technology. The Democrat also promised to visit sub-Saharan Africa in 2023.
But other priorities got in the way last year, including Israel’s war with Hamas and Biden’s long battle with Republicans to renew funding for Ukraine in its war against Russia. Biden’s promised visit to Africa never materialized. Biden, who faces a tough re-election battle in November, said in an exchange with reporters as Ruto arrived at the White House on Wednesday that he still planned to visit Africa.
“I plan to go in February after I’m re-elected,” Biden said.