G20 chair demands urgent worldwide action on Africa’s debt predicament

(MENAFN) South African President Cyril Ramaphosa has called for immediate and coordinated global efforts to address the escalating debt crisis burdening many developing nations, particularly across Africa. In his weekly national letter, Ramaphosa emphasized the urgent need for sustainable and affordable financing to help achieve the United Nations Sustainable Development Goals (SDGs) by 2030.

Reflecting on the recent 4th Financing for Development Conference in Sevilla, Spain, Ramaphosa described the world as facing unprecedented challenges, including climate change, poverty, and economic instability. He highlighted the enormous funding shortfall, estimating that an additional $4 trillion annually is needed worldwide to meet the SDGs—an amount that can only be bridged through accessible, long-term financing.

The president underscored the growing debt repayment burden, noting that about 3.4 billion people live in countries spending more on debt interest than on health and education. Citing the Jubilee Commission established by the late Pope Francis, Ramaphosa warned that although few countries have officially defaulted, many are failing their people, environment, and future prospects.

He stressed that debt, if managed well, can support development, but global shocks like the COVID-19 pandemic and ongoing conflicts have made borrowing increasingly costly. Ramaphosa pointed out that debt becomes productive when affordable and invested wisely in infrastructure and growth-promoting projects. However, recent external disruptions and tighter financing conditions have sharply increased debt costs for developing economies.

Under South Africa’s G20 Presidency, Ramaphosa outlined steps taken to confront this crisis, including forming an Africa Expert Panel led by former Finance Minister Trevor Manuel, which is tasked with providing practical recommendations for debt sustainability. Efforts are also underway to improve the G20 Common Framework to allow timely and sufficient debt restructuring.

He highlighted innovative financial tools such as climate-resilient debt clauses that automatically suspend repayments during environmental disasters, emphasizing the need for prompt and adequate support for countries facing liquidity issues.

Ramaphosa called for political will to turn solutions into large-scale action matching the magnitude of the crisis. The commitments made at Sevilla to increase fiscal space, tackle debt challenges, and reduce capital costs were reaffirmed in the recent BRICS Leaders’ Summit Rio de Janeiro Declaration, which advocates a comprehensive approach to managing debt vulnerabilities in low- and middle-income countries.

Warning that rising debt repayments threaten to derail development for generations, Ramaphosa reiterated South Africa’s dedication to collaborating with the global community to find fair, effective, and lasting solutions to the worldwide debt crisis.

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