G-20 Negotiators Back South Africa’s Push to Tackle Continent’s Debt
Negotiators for the world’s largest economies reached broad consensus to back South Africa’s G-20 priorities, including addressing the worryingly high debt of African nations.
The negotiators known as sherpas concluded the second day of meetings Tuesday that marked the start of South Africa’s Group of 20 presidency, which it took over on Dec. 1 from Brazil.
South Africa has placed easing the high levels of indebtedness faced by developing nations as one of the top priorities of its presidency.
There’s going to be a “focus on ensuring that debt sustainability for low-income countries is addressed,” including the setting up of a cost of capital commission, Zane Dangor, South Africa’s G-20 sherpa and director general at the department of foreign affairs said. “We had significant discussions around the cost of capital commission, and we had strong support from all quarters, not just from the developing countries, or from the African Union, in fact from everybody.”
South Africa is proposing the establishment of a cost of capital commission to address the debt disparities faced by developing countries, aligned with its push for a review of the G-20’s Common Framework.
The framework was introduced in 2020 to help debt-saddled countries but has been heavily criticized by both debtors and creditors as being too slow and politically fraught. Debt restructurings, in some cases, have dragged on for years.
Africa’s external debt has climbed to more than $650 billion, and debt servicing costs reached nearly $90 billion in 2024, according to the United Nations.
Another concern South Africa wants addressed is climate change financing.
“The working groups will look at issues such as strengthening disaster resilience and response, based on the fact that climate change is with us and the damage arising from climate change,” Dangor said. “There’s been specific priority of mobilizing finance for the just energy transition.”
