The transformation of global financial institutions remains critical in addressing Africa’s mounting debt challenges, as they perpetuate financial injustice, says United Nations (UN) Secretary-General António Guterres.
“The G20 must lead in delivering financial justice. Financing is fundamental — from inclusive economic growth, to supporting industrialisation and food security or addressing inequalities,” Guterres said during the closing session for the Joint Sherpa-Finance and Central Banks Deputies’ Meeting, held in Johannesburg, on Wednesday.
Guterres explained that global financial systems “load” countries with debt service costs, while denying them access to sufficient low-cost financing to fight poverty, inequality and hunger and advance the Sustainable Development Goals (SDGs).
According to the UN, in 2022, public debt in Africa reached USD 1.8 trillion.
“Developing countries must be represented fairly in their governance. These institutions must also protect economies, particularly from global shocks. It is time to mend the global safety nets that were discovered during the COVID-19 pandemic that they were no longer fit for purpose.
“This continent’s potential is without question. Africa is home to a young and growing population, rich cultural and natural diversity, and a tremendous entrepreneurial spirit. But this enormous potential continues to be held back by injustices that are deeply rooted in the history of colonialism.
“Injustice in worsening climate chaos – which Africans did virtually nothing to cause – that fuels floods, storms, hunger and deadly droughts. I stand side-by-side with President Ramaphosa and the people of Africa in this fight for justice on all fronts. Africa needs financial justice,” Guterres said.
In September, world leaders adopted the Pact for the Future, which includes commitments for ambitious reforms to make the international financial architecture representative of today’s global economy and put the needs of developing countries front and centre.
The pact covers a broad range of issues including peace and security, sustainable development, climate change, digital cooperation, human rights, gender, youth and future generations, and the transformation of global governance.
“It calls for action to move forward with an SDG Stimulus… to substantially increase the lending capacity of Multilateral Development Banks to make them bigger, bolder and better to support developing countries.
“… And to mobilise more international and domestic resources, public and private, for vital investments. Last week I appointed a group of leading experts to galvanize international support for action on debt, and I’m delighted that Trevor Manuel will be part of this important work,” he said.
As part of the work for South Africa’s G20 Presidency, Guterres participated in the first series of the more than 130 meetings that will precede the G20 Summit in 2025.
On 1 December 2024, South Africa assumed the Presidency of the G20, which comprises many of the world’s largest developing and developed economies.
The G20 was established to tackle pressing global economic and financial issues. Together, G20 members account for around 85% of global gross domestic product (GDP) and 75% of international trade.
The G20 comprises 19 countries including Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Türkiye, United Kingdom, and United States and two regional bodies, namely the European Union and the African Union.
The grouping therefore plays a critical role in influencing global policy making and fostering global economic stability.
South Africa’s G20 Presidency is the fourth consecutive emerging market Presidency, and it is also the first African Presidency, followed by the admission of the African Union (AU) as the second permanent African member. – SAnews.gov.za
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