Oluwabukola Adeogun, Author at Tribune Online

The G20 is shifting leadership away from the Global South at a time when debt risks in low-income countries are building again and raising questions about whether earlier promises on debt relief will move into real action under the United States presidency. On Sunday, South Africa handed over the G20 presidency to the United States, closing four years led by large emerging economies Indonesia, India, Brazil, and South Africa, when debt issues across developing nations became a central topic. Debt in emerging economies has now reached a record level of more than $100 trillion. Across Africa, concern is high, with the International Monetary Fund warning that around 20 African countries are already in, or close to, debt distress. "It's important that we find solutions and not just tinker at the margins," said Trevor Manuel, former South African finance minister and chair of the G20 Africa Expert Panel advising President Cyril Ramaphosa. Senegal has become a key example after billions in undisclosed borrowing led the IMF to halt a $1.8 billion programme and triggered a ratings downgrade. Gabon has used liability-management deals, including bond swaps of about $1 billion, to reduce pressure. Mozambique has begun seeking restructuring advisers, while Malawi's debt burden is approaching 90% of GDP. The G20 introduced the Common Framework in 2020 to support quicker debt restructuring for poorer countries after the COVID period, but progress on wider financial reforms has remained slow. During its chairmanship, South Africa attempted to push this work further. G20 finance ministers released the first stand-alone Ministerial Declaration on Debt Sustainability since the pandemic and agreed to strengthen the framework. So far, the Common Framework has delivered debt treatment for Chad, Zambia, Ghana, and Ethiopia. Even with the leadership transition, U.S. priorities dealing with debt challenges, supporting economic growth, and expanding jobs are expected to continue the conversation. LeCompte noted that the G20 Africa Engagement Framework, launched in October by finance ministers, was another achievement. It will tackle issues “from economic growth to debt and financing to development to anti-poverty initiatives to creating jobs across the continent,” said LeCompte. Vera Songwe, a member of President Ramaphosa’s economic advisory council, said updates to the debt sustainability framework were needed, including improvements that allow poorer nations better financing conditions. "When multilateral development banks use guarantees, they should not be penalised," she said, highlighting calls to reform the Basel Framework to lower borrowing costs. Gilad Isaacs of South Africa’s Institute for Economic Justice said the G20 has made meaningful interventions before, such as stimulus packages after the 2008 crisis and the COVID-era Debt Service Suspension Initiative, but he noted its limits: "It doesn't make policy. It's got no legal standing," he said. "We will have to find other spaces to drive those conversations and those changes", including a possible borrowers’ platform. South Africa’s Finance Minister Enoch Godongwana said he will continue advancing the group’s recommendations from the past year, including making debt relief efforts more permanent. (Reuters) ASLO READ TOP STORIES FROM NIGERIAN TRIBUNE