Johannesburg: AfricUpdate – News Desk
As part of ongoing efforts to strengthen economies on the continent, South Africa’s Group of Twenty (G20) Presidency has launched an initiative to unlock and accelerate cross-border infrastructure projects. Cross border connectivity through roads, bridges, railways, water and transmission lines is vital for fostering trade, enhancing competitiveness and lifting the living standards of people.
“Recognising that increasing quality infrastructure investment is critical to support faster economic growth, sustainable development and disaster resilience, members reaffirmed the focus on addressing impediments to scaling up private investment in infrastructure,” said the Chairs summary of the fourth G20 Finance Ministers and Central Bank Governors (FMCBG) Meeting on Thursday. During this meeting, the South Africa’s G20 Presidency launched the Ubuntu Legacy Initiative as it supports the full operationalisation of the African Continental Free Trade Area (AfCFTA) agreement.
The trade agreement intends to boost intra-Africa trade and economic integration by creating a single continental market for goods and services. The Infrastructure Working Group, under the South African Presidency, has provided practical solutions to developing a credible pipeline of projects underpinned by an enabling environment and well-structured project preparation practices supported by the availability of timely and good-quality market and project level data.
Moreover, the group came up with solutions on the de-risking of sustainable infrastructure investments through blended finance instruments, including guarantees and credit enhancements; and advancing cross border projects for regional development across economic, governance and financial dimensions. To ensure the effective implementation of the project, the National Treasury has partnered with the African Development Bank. The G20 reaffirmed the critical role of Multilateral Development Banks (MDBs) in driving poverty reduction, economic growth, and development across client countries.
“Members underscored the need for enhancing the representation and voice of developing countries in decision-making in MDBs and other international economic and financial institutions. Members committed to addressing debt vulnerabilities in low- and middle-income countries in an effective, comprehensive and systematic manner,” the Chairs summary said. In addition, the Finance Ministers and Central Bank Governors reaffirmed support for the Common Framework for Debt Treatments beyond the Debt Service Suspension Initiative (DSSI).
They welcomed the DSSI recent progress, which further strengthens its implementation in a predictable, timely, orderly, and coordinated manner. Launched in 2020, the DSSI temporarily suspended debt payments for eligible low-income countries to help them cope with the economic impact of the COVID-19 pandemic.
“Members welcomed the increased information sharing between the G20 and the Global Sovereign Debt Roundtable (GSDR) and expressed support for continuing this collaboration. Members noted the G20 Presidency’s note on supporting debt sustainability and addressing liquidity challenges in vulnerable developing countries. Members noted the G20 Technical Presidency note on the recent voluntary use of climate resilient debt clauses (CRDCs). Members called for enhanced debt transparency from all stakeholders, including private creditors. Members supported a G20 Ministerial Declaration on Debt Sustainability,” the statement said.
They urged the international community to support vulnerable countries whose debt is sustainable but are facing liquidity challenges and encouraged the International Monetary Fund (IMF) and the World Bank to further continue their work on feasible options to support these countries, which should be country-specific and voluntary.
“Members generally supported continued IMF collaboration with Regional Financing Arrangements (RFA). Members have advanced the domestic approvals for their consent to the quota increase under the 16th General Review of Quotas (GRQ) and look forward to finalising this process with no further delay.” They acknowledged the importance of realignment in quota shares to better reflect members’ relative positions in the world economy while protecting the quota shares of the poorest members.
“Members acknowledged, however, that building consensus among members on quota and governance reforms will require progress in stages. Members supported the call for the IMF Executive Board to develop a set of principles guiding future discussions on IMF quotas and governance by the 2026 Spring meetings in line with the Diriyah Declaration. Members acknowledged the growing influence of non-bank financial institutions (NBFIs) on capital flows and noted the International Financial Architecture Working Group Co-chairs’ note on understanding NBFI behaviour and investment in emerging market and developing economies (EMDEs),” said the summary.
