Group of 20 (G20) finance ministers and central bank governors closed their meeting in Cape Town on Thursday without reaching consensus on a communique, instead agreeing to a chair’s summary.
However, that was only after what finance minister Enoch Godongwana describes as “a very robust discussion”.
“The SA president has been keen to use every opportunity to forge consensus as far as possible, though he also respects and acknowledges that differences remain,” Godongwana said at the closing press conference.
This week’s meeting was not expected to reach consensus amid the tension and uncertainty created by the administration of US President Donald Trump, whose new treasury secretary, Scott Bessent, did not attend the meetings in Cape Town.
Godongwana emphasised on Wednesday that “no flag was absent”, noting that Bessent had initially accepted SA’s invitation but later cancelled after Trump called a cabinet meeting this week.
The G20 foreign ministers’ meeting earlier in the week also produced a chair’s statement rather than a communique, which is more difficult to achieve because it requires consensus.
SA is not expected to be judged too harshly this year if it fails to reach a consensus amid tension over a range of issues, from financial regulation and taxation to tariffs and multilateralism.
Indonesia’s and India’s G20 presidencies in 2022 and 2023 also ended with only chair’s statements, mainly because of division on Russia’s invasion of Ukraine, while Brazil last year managed to pull off a communique. But the division is broader, now, with one official on Thursday describing this week’s meetings as “the rest of the world vs the US”.
Though the G20 has long opposed protectionism and the fragmentation of the global economy as bad for global growth, the chair’s statement released on Thursday explicitly “reiterated the commitment to resisting protectionism”.
The finance ministers and central bank governors were also much less optimistic this time than they were at the final finance track meeting in October in Brazil, where they said in their communique: “We observe good prospects of a soft landing of the global economy, although multiple challenges remain.”
This time, the chair’s statement said global economic growth had been subdued, and though many parts of the world had shown resilience “some upside risks could materialise”.
Reserve Bank governor Lesetja Kganyago, who co-hosted the finance track meetings with Godongwana, said that a lot had changed, and pointed to heightened uncertainty in the global economy.
Godongwana said “most” of the G20 members this week endorsed the work programme for the finance track for this year, which provided the basis for the presidency to work in partnership with international organisations to implement this.
The Cape Town meeting was the first of four finance track meetings which SA will host as this year’s G20 president.
The finance track, which brings together central bank governors and finance ministers, is the original form in which the G20 convened 26 years ago to try to restore stability and growth in the wake of the 1998 Asian crisis.
SA has made it a priority to ensure Africa’s voice is heard in the G20 and to shape the group’s agenda to take account of the continent’s challenges.
Nigeria and Egypt had now been accepted as permanent invitees to the G20, Godongwana said on Thursday. SA had also invited the five regional economic communities to participate this year.
The G20’s efforts to get a bigger voice for Africa in the major Washington-based international financial institutions go back to 2006, when Australia was president.
While a third chair for Sub-Saharan Africa was created in the World Bank in 2009, it was only last year that the IMF finally created a third chair for Sub-Saharan Africa, so that the boards of both Bretton Woods institutions now each have 25 members, Kganyago said. “These things have to be negotiated globally and take time.”
The international financial architecture is the subject of one of the finance track working groups, and the G20 is working to achieve bigger, better and more effective multilateral development banks.
This week it encouraged these to work with developing countries to enhance domestic resource mobilisation and increase private capital investment by supporting enabling conditions and addressing potential obstacles to private investment.
The chair’s summary also “reiterated efforts to promote sustainable capital flows to emerging markets and developing economies and foster sound policy frameworks, notably through central bank independence”.
And it recognised the increasing importance of nonbank financial institutions, and planned to deepen understanding of their role in shaping capital flows to emerging markets and developing economies.
The meeting and the work groups are also focused on sustainable finance, infrastructure and financial sector issues, as well as on financial inclusion and international taxation.
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