Ruto Accuses IMF of Blocking Loans to Poor Countries, Wants Leadership Changes

President William Ruto on Wednesday called for leadership changes at the International Monetary Fund (IMF) after accusing the Bretton Woods institution of blocking loans to poor countries.

Why It Matters: The Head of State has been attempting to renegotiate loan terms with the lender to better accommodate new tariffs announced by his U.S. counterpart, Donald Trump, after cancelling a 4-year deal valued at Ksh466 billion.

In a lengthy speech at Peking University in China, Ruto noted that the most consequential reform at the lender (alongside the World Bank) is governance changes that will transform the IMF into an independent, apolitical global institution, insulated from the national interests of its shareholders.

He said, "Surprisingly, this requires no more than adopting modern corporate governance best practice. The shareholders should elect directors, and the directors should appoint and supervise competent, professional management."

The Head of State further argued that development in both the IMF and World Bank has evolved into development institutions, but ownership and power remain with the wealthy countries they no longer serve.

"The interests of the shareholders, stakeholders, and beneficiaries are at great variance. This anomaly became glaring during the IMF SDR issuance, where 64 percent of the allocation ended up with wealthy countries that did not need liquidity support. The poorest countries, which needed it most, received only 2.4 percent," he added.

He further argued that the status quo in the two institutions is no longer tenable since 80 years ago, when they were founded, two-thirds of the world’s nations did not exist as sovereign states.

Last month, Ruto's administration cancelled a 4-year deal with the IMF valued at Ksh466 billion, foregoing Ksh110 billion in the process. In a later interview, Prime CS Musalia Mudavadi noted that the government was determined to renegotiate its terms of engagement in the wake of stringent tariffs announced by Donald Trump, as well as concerns raised by Gen Z and millennial protests in 2024.

In his speech, the Head of State noted that the trade tariff wars could signal the end of the old world order as it has existed since the end of World War II.

"The financial and security architecture that arose out of the ashes of that conflict has largely benefited the Global North at the expense of the Global South, with the exclusion of everyone else," he told the congregation.

Signing 7 Deals

Since landing in China on Tuesday, President Ruto and his entourage have already signed 7 deals across tourism, manufacturing, and agriculture worth Ksh100.1 billion ($773 million). They are:

• Kenya’s partnership with Zonken Group, worth Ksh51.8 billion ($400 million), for large-scale aloe cultivation, processing, and an export base in Baringo. The deal is expected to create 500 jobs.
  
  
• Kenya’s partnership with China Wu Yi Company, worth Ksh19.4 billion ($150 million), for investment in a Special Economic Zone for manufacturing, processing, and warehousing in Kikambala, Kilifi County. The project is expected to generate 5,000 jobs.
  
  
• A deal with Rongtai Steel Company, worth Ksh12.9 billion ($100 million), to expand the steel manufacturing plant in Lukenya. It could create 3,000 jobs.
  
  
• A Ksh6.4 billion ($50 million) deal was also reached for the development of the Kenya Smart Transportation Industry Park in Mombasa. It is expected to generate 5,000 jobs.
  
  
• A Ksh3.8 billion ($30 million) project for a hen-laying farm in Kenya is also expected to create at least 500 jobs.
  
  
• A Ksh2.9 billion ($23 million) partnership with Hunan Conference Exhibition Group for hotel acquisitions and leases in Nairobi to boost tourism.
  
  
• The government also inked a Ksh2.5 billion ($20 million) deal for a godowns project to set up manufacturing factories for textiles, garments, and solar power in Murang’a and Athi River. It could generate 7,000 jobs.