Pretoria: President Cyril Ramaphosa has received the G20 Africa Expert Panel Report aimed at dealing with the continent's most pressing economic challenges, including country debt and investment. Earlier this year, National Treasury noted that the continent is faced with an 'unprecedented debt crisis' with countries expected to pay nearly $89 billion in external debt service this year, added to some 20 countries facing debt distress. This led to the formation of a 26-member strong, expert panel with South African former Finance Minister Trevor Manuel as chairperson.
According to South African Government News Agency, in written remarks for the handover of the report, President Cyril Ramaphosa warned that the question of debt puts the development of the continent at risk. He emphasized that failure to address the debt burden could result in a lost decade for development in Africa and other regions. South Africa has prioritized debt sustainability during its G20 Presidency. The Ministerial Declaration on Debt, agreed by G20 member countries, acknowledges the significance of the debt and development challenge and provides a basis for further concrete action. The report of the Africa Expert Panel proposes specific measures that build on these commitments.
The report underscores the high cost of capital that African countries face, which raises borrowing costs and limits equity investment. To reduce these costs, there is a need to mobilize more concessional funding from multilateral development banks and African trade and finance institutions. It also calls for addressing biased risk perceptions of Africa by mandating greater transparency and accountability from credit rating agencies.
The report contains several recommendations on debt, including launching a new G20 debt refinancing initiative for low-income and vulnerable countries, establishing a Borrowers' Club to strengthen the collective voice of borrowers, building a multilateral sovereign debt resolution mechanism, and assisting developing countries to strengthen debt transparency.
On accelerating investments in Africa, the recommendations include defining national growth programs, accelerating the implementation of the African Continental Free Trade Agreement (AfCFTA), and improving the regulation of Credit Rating Agencies.
President Ramaphosa concluded by stating that the proposed actions could create an investment boom in Africa. South Africa plans to advance these proposals in the G20 and other international forums, working closely with the African Union and other partners. The report aims to significantly boost efforts to ensure Africa mobilizes the necessary resources for development and growth.