UK chancellor Rachel Reeves has made supportive noises about finance minister Enoch Godongwana’s delayed budget last week, pointing to how tough it was to be a finance minister in a coalition government.
“I’m a finance minister. I know budgets are challenges — and my party has got a big majority in parliament. We don’t have to act in a coalition. I’ve got every confidence that SA will be able to get a budget through,” Reeves said (when asked about the budget delay) in an interview on the sidelines of the Group of 20 (G20) finance ministers and central bank governors meeting in Cape Town on Wednesday.
Her comments came after President Cyril Ramaphosa made a robust case on Wednesday for the importance of forums such as the G20 in the face of what he described as “the erosion of multilateralism”, as he detailed the group’s role in stabilising the global economy through the global crises of the past 25 years, in an implicit rebuke to the growing insularity and protectionism of the US and others.
Opening the G20’s first high-level meeting of finance ministers and central bank governors, Ramaphosa did not mention the US. But with new US secretary of state Marco Rubio and treasury secretary Scott Bessent declining to attend this week’s G20 foreign and finance ministers’ meetings in SA, and the Trump administration pulling out of global forums such as the World Health Organisation and World Trade Organisation, there are concerns that the G20 could be undermined — especially given that the US is due to take over the presidency from SA next year.
The US Embassy said on Wednesday that a senior treasury official would attend the finance meetings in Cape Town. But it confirmed that US Federal Reserve chair Jerome Powell was in town.
“I know people say this country hasn’t attended, that country hasn’t attended. There’s always a reason. The new US treasury secretary is only a few weeks into his job. But the US central bank governor Jay Powell is here. He spoke this morning and the US treasury is represented here. So the US voice is round the table as is every voice from the G20, and SA has invited some countries outside the G20 to participate ... we’re having interesting and useful conversations,” Reeves said.
Ramaphosa said it was more important than ever for the G20 members to work together at this time of global uncertainty and escalating tension.
“The erosion of multilateralism presents a threat to global growth and stability,” he said. “At this time of heightened geopolitical contestation, a rules-based (international) order is particularly important as a mechanism for managing disputes and resolving conflict.”
Multilateral co-operation was the only hope to overcome unprecedented challenges of slow and uneven economic growth, rising debt burdens, and persistent poverty and inequality as well as the existential threat of climate change.
Treasury director-general Duncan Pieterse picked up the theme later in the day when he spoke to learners at his old high school in Cape Town, Harold Cressy, noting that recent elections had led to a lot of reassessing by certain countries about how they engaged with the G20 and what their priorities were.
However, he said: “As for the big globally systemic economies and countries, the most important thing for the prosperity of the world is to keep talking”.
Former finance minister Trevor Manuel and SA Revenue Service commissioner Edward Kieswetter are also alumni of Harold Cressy.
Reeves also addressed questions on UK Prime Minister Keir Starmer’s recent announcement that the UK would cut overseas development aid from 0.5% to 0.3% of gross national income to fund higher defence costs. This did not mean the UK was ending its international development spending, she said.
Quite a lot of the UK’s international development money had been taken up with hotel costs for asylum seekers in recent years.
As it reduced that backlog, much of the international development money would be able to be spent, as it was supposed to be, on some of the world’s poorest countries.
Reeves said she was also working with multilateral lenders such as the European Bank for Reconstruction and Development and the World Bank on how to get more private investment in some of the poorest countries to fund the energy transition and other development projects.
The UK is one of the key members of the international partner group that pledged more than $9bn to fund SA’s just energy transition.
The G20 sessions are all closed sessions, with little detail shared in the public domain, but SA Reserve Bank governor Lesetja Kganyago and Godongwana are expected to brief media on Thursday evening at the close of the week’s meetings on the outcomes.
The general view is that no-one will blame SA if it does not manage to get consensus on the communiqués the G20 ministers usually aim for, and in a difficult environment is more likely to settle for agreement on the chairman’s summaries at the end of the meetings.
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