G20 finance ministers and central bank governors closed their Durban meeting on Friday with agreement on the first communique of SA’s G20 presidency, committing to central bank independence and affirming the role of the World Trade Organisation (WTO) in the face of Trump administration attacks and global political tensions.
“To achieve what we’ve done in this environment is a huge success,” said finance minister Enoch Godongwana, likening this year’s G20 to Indonesia’s G20 presidency in 2022, which was overshadowed by Russia’s invasion of Ukraine and ended without a summit communique.
Other G20 groups, including the main sherpa track, have so far this year failed to reach the consensus required for a communique, merely issuing a chair’s statement on proceedings.
“That there is a communique is a win for SA. It shows it has the diplomatic skills and leadership to lead everyone to consensus — even though there is not much content in the communique,” said Prof Danny Bradlow, a senior fellow at the SA Institute of International Affairs.
Most surprising was that the communique referred to the WTO at all, Bradlow said, given how dysfunctional the organisation was at the moment and that the tariffs announced by US President Donald Trump were not consistent with WTO rules.
The G20 finance leaders on Friday emphasised the importance of strengthening multilateral co-operation to address existing and emerging risks to the global economy.
“We will continue to pursue efforts that advance prosperity and recognise the importance of the WTO to advance trade issues, and acknowledge the agreed upon rules in the WTO as an integral part of the global trading system,” said the communique, which recognised that the WTO needed meaningful and comprehensive reform to make it more responsive to today’s realities.
The finance leaders also reaffirmed their commitment to “a strong, quota-based and adequately resourced IMF at the centre of the global financial safety net”. They said central bank independence was crucial to achieving the goal of price stability and supported central banks in making decisions based on the data. They said they were committed to addressing debt vulnerabilities in low- and middle-income countries effectively and timeously.
Bradlow said it was disappointing, however, that SA had not used its opportunity as president to do more to advance efforts on sovereign debt restructuring.
The finance track, formed as the original G20 event in the late 1990s before it was elevated to heads of state level during the 2008/09 global financial crisis, tends to deal with macroeconomic and financial stability issues that are less contentious than the political tension that overshadows the larger forum.
Insiders said disagreements among the finance leaders had been largely about form, not substance, enabling consensus to be found on cautious language in areas such as climate change and trade imbalances that was acceptable to the US and China.
Though US treasury secretary Scott Bessent and Federal Reserve chair Jerome Powell did not attend, the US was represented in Durban by treasury deputy secretary Michael Kaplan and Fed vice-chair Philip Jefferson.
The G20 finance leaders also endorsed SA’s efforts to put Africa’s growth and development challenges on the G20’s agenda, with SA completing four notes, on the cost of capital, the continent’s infrastructure deficit, the quality of institutions and as well as a report this week from the expert panel on Africa led by Trevor Manuel
With SA’s presidency more than halfway in, G20 finance leaders have made progress in areas such as regulatory changes to enable cheaper, faster cross border payments and financial inclusion.
They also addressed concerns about the minimum global tax rate for companies and completed reports on infrastructure and climate financing.
The leaders have committed to scaling up multilateral development bank financing, with richer countries so far transferring $100bn of their IMF special drawing rights to support poorer countries.
The next G20 finance leaders meeting will be hosted by SA at the IMF/World Bank annual meetings in Washington in October. This will be the fourth and final finance track meeting for SA’s presidency before the leaders summit in Johannesburg in November.
IMF first deputy MD Gita Gopinath said in a statement after the Durban meeting concluded on Friday that high levels of policy uncertainty remained a key theme in the discussions. “But so too did the shared objective to navigate through this uncertainty and seek ways — domestically and collectively — to spur growth,” she said.
The IMF will update its global forecast at the end of July but “downside risks continue to dominate the outlook and uncertainty remains high”, Gopinath said. Economic indicators reflected a complex backdrop shaped by trade tensions.
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