More than 165 civil society organizations from across the globe have delivered a sharp rebuke to South Africa’s G20 presidency, arguing that despite rhetoric about prioritizing debt relief for developing countries, the year has produced negligible progress on what they describe as a crippling crisis. The open letter to President Cyril Ramaphosa, released Monday as World Bank and IMF meetings opened in Washington, calls for radical reform including debt cancellation and establishment of a UN sovereign debt framework.
The criticism comes as South Africa prepares to hand the G20 presidency to the United States in December, closing a year that civil society groups characterize as a missed opportunity. When South Africa assumed the rotating presidency in December 2024, President Ramaphosa identified debt sustainability for low income countries as one of four priorities, raising expectations among development advocates that Africa’s voice might shift global debt negotiations.
Those expectations have largely gone unmet, according to the coalition of organizations spanning Africa, Asia, Latin America, Europe, and North America. The letter notes that despite billing this as an “African G20,” there is no evidence of meaningful progress on the debt crisis facing Africa and many other countries during South Africa’s tenure.
“While we are encouraged by the emphasis given to the issue, we are concerned by the lack of demonstrable progress during your presidency of the G20,” the organizations wrote. They pointed to the Finance Track Communiqué from the third Finance Ministers and Central Bank Governors Meeting as essentially communicating nothing new, suggesting the African Expert Panel has had little success shifting the needle on debt within the G20.
The letter arrives amid stark statistics about Africa’s debt burden. According to a UNDP report cited by the organizations, African countries are charged significantly higher interest rates than countries in other regions with comparable credit ratings and macroeconomic indicators. This “African premium” costs African countries $74.5 billion per year in excess interest payments.
President Ramaphosa himself has acknowledged the severity of the situation. At the Fourth International Conference on Financing for Development in Seville, Spain, he noted that 23 countries in Africa are paying more for debt costs than for critical development enablers like health, care, and education. Similar situations affect several Latin American, Caribbean, Asian, and Pacific countries.
The organizations argue that current debt arrangements remain inadequate despite some progress under the G20’s Common Framework. They characterize restructuring processes as too slow, debt reductions as too shallow, and the sharing of responsibility between public and private creditors as deeply unequal. They also assert that the current international financial architecture fails to address financing costs, secure net positive flows to developing countries, or ameliorate human impacts of debt distress.
African Heads of State and Finance Ministers have previously expressed skepticism about the Common Framework. In statements quoted by the civil society coalition, they welcomed it as a first step but said it has not provided a pathway toward quick restoration of debt sustainability, creating considerable doubt about its potential to deliver effectively for highly indebted countries, particularly in Africa.
The letter presents seven specific demands, including participation in an intergovernmental process at the UN toward recommendations for debt architecture reform as agreed at the Fourth Financing for Development Conference. The organizations call for a UN Framework Convention on sovereign debt that centers human rights and equity, prohibits austerity measures undermining essential services, binds private creditors to human rights standards, and delivers a global mechanism for fair and transparent restructurings under UN auspices.
They also demand radical reform to debt restructuring processes based on lessons from the Common Framework, establishment of an African Credit Rating Agency, creation of a Borrowers Club to facilitate cooperation among debtor countries, and agreement on selling IMF gold reserves to finance a debt relief fund.
The coalition calls for “the cancellation of all unsustainable and illegitimate debts, from all creditors” to protect funds needed for education, health, gender equality, and climate resilience. This maximalist position reflects frustration with incremental approaches that civil society groups argue have failed to address the scale of the crisis.
Signatories include major international development organizations like ActionAid International, Amnesty International, Christian Aid, and Oxfam South Africa, alongside dozens of African grassroots organizations from countries including Ghana, Kenya, Nigeria, South Africa, Uganda, Zambia, and Zimbabwe. Regional networks from Latin America, Asia, and Europe also signed.
The timing of the letter, released on the first day of the IMF and World Bank Annual Meetings, appears designed to maximize pressure as finance ministers and central bank governors gather in Washington. The G20 Finance Ministers are meeting Wednesday and Thursday this week, with expectations they will produce a declaration on debt.
Whether such a declaration will satisfy civil society demands remains highly uncertain. Previous G20 statements on debt have produced limited concrete action, with creditor countries showing reluctance to accept significant haircuts on sovereign debt and private creditors resisting binding participation in restructurings.
The letter acknowledges that South Africa’s emphasis on debt sustainability as a G20 priority “has the potential to catalyse meaningful reform in global debt systems, addressing immediate crises while paving the way for systemic changes that benefit Africa and the developing world.” However, it bluntly states that “so far nothing tangible let alone ambitious has been achieved.”
The organizations warn that South Africa “runs the risk of failing to deliver meaningfully on this priority” as the presidency nears its end. They frame their proposals as aligning with South Africa’s foreign policy objectives of fostering peace, security, democracy, and inclusive development across Africa, as well as the African Union’s G20 priorities for reforming the international financial architecture.
The transition to a United States presidency raises questions about whether debt relief for developing countries will remain a G20 priority. While South Africa brought African perspectives and priorities to the fore, the incoming presidency may emphasize different issues, potentially leaving debt reform efforts stalled.
For developing countries struggling with unsustainable debt burdens, the civil society coalition’s assessment suggests another year has passed without fundamental changes to an international financial system they argue systematically disadvantages them. Whether the final weeks of South Africa’s G20 presidency will yield any breakthrough remains uncertain as finance ministers gather in Washington this week.
Source: newsghana.com.gh
