Biden and Ruto Call for Global Action to Reduce Developing Nations' Debt Burden

President Joe Biden and Kenyan President William Ruto have called on economies around the globe to take action to reduce the enormous debt burden crushing developing nations like Kenya.

President Joe Biden and his Kenyan counterpart, William Ruto, are using the first state visit to the United States by an African leader in over 15 years to call for global action to alleviate the crushing debt burden weighing down Kenya and other developing nations. This call to action, dubbed the Nairobi-Washington Vision, is part of Biden's ongoing efforts to position the US as a better partner for African nations than China, which has been expanding its presence on the continent with often unfavorable financing terms.

Biden and Ruto urge creditor nations to reduce financing barriers for developing countries facing high debt burdens. They also advocate for international financial institutions to coordinate debt relief and support through multilateral banks and institutions, offering more favorable financing conditions. "Together we will urge the international community to unite around these principles to provide high-ambition countries with high-ambition financial support," the White House outlined in a fact sheet detailing the initiative.

In addition, the White House pledged $250 million in grants to the International Development Association, an arm of the World Bank, to aid impoverished countries facing crises. Furthermore, a $1.2 trillion government funding bill approved by Congress in March enables the US to contribute up to $21 billion to the International Monetary Fund's Poverty Reduction and Growth Trust, which offers zero-interest loans to low-income countries seeking to stabilize their economies, stimulate growth, and enhance debt sustainability. This financing is anticipated to become available to the IMF in the coming weeks.

The pair are scheduled to hold formal talks and a joint news conference on Thursday, followed by a state dinner in a pavilion on the White House's South Lawn. An Associated Press analysis of a dozen countries deeply indebted to China, including Pakistan, Kenya, Zambia, and Laos, revealed that such debt consumes an increasing portion of tax revenue, hindering the provision of essential services such as education, electricity, and food and fuel.

China's reluctance to forgive debt and its secretive approach to lending, concealing the amount and terms of its loans, has prevented other major lenders from providing assistance. Kenya's debt-to-GDP ratio exceeds 70%, with the majority owed to China. Credit ratings agency Fitch projects that Kenya will allocate nearly one-third of its government revenue to interest payments alone this year.

Ruto emphasized during Wednesday's discussions that his talks with Biden would address "how we can have a fairer international financial system where all countries are treated equally." Biden also informed Congress on Thursday of his intention to designate Kenya as a major non-NATO ally, according to the White House. This largely symbolic designation reflects Kenya's evolution from a regional partner collaborating with US counterterrorism operations on the continent to a significant global player with an expanding presence even in the Western Hemisphere. Kenya will be the first sub-Saharan African nation to receive this status.

Kenya is expected to deploy 1,000 police officers to Haiti shortly to assist in quelling gang violence that has ravaged the Caribbean nation in recent months. The Biden administration has praised Kenya for stepping up in Haiti when few other nations have done so. Haiti is the Western Hemisphere's poorest country, plagued by political instability and natural disasters for decades.

The US has committed $300 million in financial aid to the Haiti mission, which will also receive support from the Bahamas, Barbados, Benin, Chad, and Bangladesh. Ruto is anticipated to discuss the upcoming mission with Biden, Defense Secretary Lloyd Austin, and other officials during his Washington meetings.

Ruto arrived in Washington on Wednesday and commenced his three-day state visit by meeting with Biden and tech executives from Silicon Valley and Kenya's thriving tech sector, known as the Silicon Savannah. Administration officials have hinted at several private sector investments anticipated to be declared during the visit. Ruto emphasized to the tech executives that Kenya, and Africa as a whole, has a young, innovative population "hungry for opportunities."

"I believe this is a pivotal moment for exploring investment opportunities between Kenya and the United States," Ruto stated.

In December 2022, Biden convened dozens of African leaders in Washington to emphasize the US's commitment to Africa's future under his leadership. He detailed billions in promised government funding and private investment on the continent in areas such as health, infrastructure, business, and technology. The Democrat also promised to visit sub-Saharan Africa in 2023.

However, other priorities, such as the Israel-Hamas conflict and Biden's prolonged struggle with Republicans over continued funding for Ukraine's war with Russia, intervened last year. Biden's planned Africa visit never occurred. Biden, who faces a challenging reelection bid in November, told reporters as Ruto arrived at the White House on Wednesday that he still intends to visit Africa.

"My plan is to go in February after I get reelected," Biden stated.