Deputy finance minister David Masondo said this weekend’s G20 conscientised the global community to the need to assist Africa and emerging economies achieve greater growth for stronger global prosperity.
Speaking to the Sunday Times on the sidelines of the G20 Leaders’ Summit on Sunday afternoon, he said the summit and the various finance track meetings that sat throughout the year between G20 finance ministers and central bankers agreed on the need for inclusive growth and multilateralism over protectionism and trade fragmentation.
“You can have equality in the context of scarcity, but it doesn’t have prosperity. People’s needs may not be met, because you can be equal in the midst of poverty. It’s possible [but the global economy must prosper evenly], and it’s for that reason we felt that economic growth is quite critical.
“But for us to have economic growth, from an African perspective, we need to sort out our infrastructure, we need to industrialise at the back of the critical minerals that we have. But for that to happen, you need capital to flow, because economic growth requires capital.”
The G20 Leaders’ Summit Declaration reaffirmed the support of most members for a return to a multilateral economic world order. This comes as the second term of US President Donald Trump has been characterised by steep tariffs that the president has weaponised against other economies.
For the first time since the war in Ukraine, the G20 family adopted a communique in July, in Zimbali in Durban. So, that’s a great achievement for us that we managed to negotiate and generate consensus amongst the G20 members on a whole range of issue.
— David Masondo, deputy finance minister
Masondo called the summit and the adoption of the declaration a proud moment for South Africa as well as the African continent. He said the finance track of the G20, which held various meetings throughout the year, had a stable and successful year with a communique adopted.
“For the first time since the war in Ukraine, the G20 family adopted a communique in July, in Zimbali in Durban. So that’s a great achievement for us that we managed to negotiate and generate consensus among the G20 members on a whole range of issues.”
He said the single biggest priority of the finance track was to ensure that the global economy grows inclusively so that the productive capacity of the world’s economies has a healthy consumer base to drive more productivity.
“The themes around solidarity, equality and sustainability require economic growth. Because if there is no economic growth, you’ve got scarcity, and if there’s scarcity, we fight over little resources, and if Africa is not growing, all of these tensions around migration and all that start to emerge, and you start having conflicts among Africans. You start having xenophobia, even within countries, people will be fighting over little resources.”
The G20 Leaders’ Summit Declaration said the meeting emphasised that sustainable industrialisation is a cornerstone of sustainable development and energy transitions. It noted the High-Level Voluntary Principles for Sustainable Industrialisation Hubs to support sharing the benefits of industrialisation, including through manufacturing and beneficiation of minerals and resources at source.
“We reaffirm the voluntary Principles for Just and Inclusive Energy Transitions and recall the Rio de Janeiro Leaders’ Declaration on our commitments to promote clean, sustainable, just, affordable and inclusive energy transitions.”
On the debt trap facing African and other emerging economies, the declaration said that the G20 recognises that a high level of debt is one of the obstacles to inclusive growth in many developing economies, which limits their ability to invest in infrastructure, disaster resilience, healthcare, education and other development needs.
“While the risk of a systemic debt crisis appears to be broadly contained, many vulnerable low and middle-income countries face high financing costs, large external refinancing needs and a significant outflow of private capital.
“These debt vulnerabilities, along with other factors, can constrain their fiscal space, their ability to address poverty and inequality, and their capacity to invest in growth and development. The situation is particularly challenging for many low-income countries, especially those in Africa.”
The declaration noted with concern that interest payments on total external public debt have increased significantly and have more than doubled over the past decade for low-income countries (LICs).
“We support the ongoing review of the International Monetary Fund (IMF)-World Bank Low-income Countries Debt Sustainability Framework, which will result in further improving the methodology underpinning the IMF-World Bank Debt Sustainability Analysis for LICs and thus contribute to understanding and addressing debt vulnerabilities more effectively.”
The presidency of the G20 now shifts to the US, which will hold a G20 Leaders’ Summit next year.
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