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Kenya’s president has called for a global debt relief deal to help indebted African countries deal with the devastating effects of climate change, insisting the two issues are indelibly linked.
After Zambia and Ghana defaulted on their debt last year, most countries on the continent lack the funds needed to tackle a range of pressing problems, including climate change, William Ruto said.
“You cannot solve the climate problem without solving the debt problem,” he told the Financial Times at the first Africa climate summit in the Kenyan capital Nairobi this week. “These countries need a new tool — finding ways to prevent defaults before they happen.”
Nearly half of the countries in sub-Saharan Africa are either in debt distress or at high risk of debt distress, according to the World Bank, including Kenya.
Rwandan President Paul Kagame, US climate envoy John Kerry and European Commission President Ursula von der Leyen joined more than two dozen African presidents and 30,000 delegates for the three-day meeting.
There has been debate over a range of issues, including how to increase the supply of carbon credits to enable polluters to offset their emissions by investing in renewable energy, bearing in mind the significant impacts of climate change already on Africa.
UN Secretary-General António Guterres said on Tuesday that Africa accounts for just 4 percent of global greenhouse gas emissions, “yet it suffers some of the worst impacts of rising global temperatures”.
One solution would be to allow debt repayment maturities to be extended and introduce grace periods of up to ten years, allowing money to be invested elsewhere. “So instead of spending billions of dollars this year paying down debt, we use it for other things. Then in 10 years, our economy will be stable and we can pay our bills,” Ruto said.
“We don’t want to imply that we want to write off the debt. No, we want to pay,” he added. Kenya currently pays up to $8 billion in debt annually.
Lenders’ funding shortfalls can be made up by expanding special drawing rights and increasing balance sheet leverage, he said. “Nobody loses money, we just postpone the date,” Ruto said. “It doesn’t take rocket science.”
Kenya is experiencing one of its worst droughts, killing 2.5 million livestock in more than a year. “This $1.5 billion loss is a direct consequence of climate change,” Ruto, a botanist and zoologist by training, said of the financial impact.
Ruto stressed that China, which has sent officials to the Nairobi summit, must be part of the “dialogue” because its lenders account for 12 percent of Africa’s private and public external debt. “China is here because they are interested. They cannot avoid conversations about debt distress,” Ruto said.
With proper funding, Africa can tap into its natural assets and energy resources. The carbon storage in the Congo Basin alone is equivalent to 15 years of US emissions.
Ruto said he wanted to boost Africa’s share of the $3.5 trillion a year in global investment to meet the goals of the Paris climate agreement to cut emissions by 45% by 2030 and reach net-zero emissions by 2050. “Currently, only 1% of renewable energy financing resources come to Africa, so we aim to reach 10% by 2028 and 40% by 2050,” he said.
The Kenyan president said the Nairobi meeting, ahead of this month’s U.N. climate conference in New York and November’s COP28 U.N. conference in the United Arab Emirates, was also an attempt to shift the focus from drought and famine to “green growth”. and climate finance”.
“This summit is to solidify the idea of Africa because all the time ‘Africans are complaining’ and we are the victims,” Ruto said. “While all of this is true . . . we have ideas about how to address climate change.”
Delegates expected to produce a “Nairobi Declaration” at the conclusion of the summit. Leaders are keen to highlight a long-term goal to boost clean energy production on a continent where 640 million people still lack access to electricity, and to create a $6 billion market for carbon-reducing projects by 2030. They may also demand that rare metals mined in Africa should be disposed of there.
However, in an open letter to Ruto, 500 activist groups argued that the summit proposed “the wrong solutions” that were “promoted as priorities for Africa”, including carbon markets and carbon sequestration. The letter pointed out that these are the “interests” of the West.