Question NW907 to the Minister of International Relations and Cooperation
25 March 2025 - NW907
Modise-Mpya, Ms M to ask the Minister of International Relations and Cooperation
With the Republic prioritising debt sustainability for low-income countries, what tangible plans will our G20 Presidency promote to (a) eradicate the debt crisis affecting African states and (b) ensure that debt relief efforts are meaningfully implemented?
Reply:
a) Under South Africa’s G20 Presidency, the G20 will renew its efforts to tackle the critical issue of debt sustainability, with a particular emphasis on Africa. One of the ways which South Africa will address the debt question is through the establishment of a Cost of Capital Review during its G20 Presidency. This Review, to be pursued in the Finance Track, will deliver a comprehensive expert review on the issues impacting the cost of capital for developing economies which could help address future debt sustainability issues and the related fiscal space challenges.
Building on G20 initiatives undertaken in recent years, South Africa will seek to advance sustainable and practical solutions to tackle high structural deficits and liquidity challenges and extend debt relief to developing economies. South Africa will also seek to ensure that the sovereign credit ratings are fair and transparent and to address high risk premiums for developing economies.
b) Our Presidency of the G20 will push for the endorsement of the UN Secretary-General’s call for reform of the global financial architecture, including the multilateral trading system and Multilateral Development Banks (MDBs) to enable developing countries to lift themselves out of debt.
The initiative is designed to address weaknesses in the international debt architecture, including high financing costs and the primacy of debt service payments over essential development needs, with the aim to reduce the negative human impacts of debt distress.