At G20 meeting, African leaders launch initiative calling for debt relief package for emerging economies
Nigeria’s former vice president, Yemi Osinbajo, said debt restructuring and lowering the cost of capital were key to addressing Africa’s debt crisis.
President Cyril Ramaphosa addressed the G20 Foreign Ministers' Meeting in Johannesburg on 20 February 2025. Picture: @g20org/X
JOHANNESBURG - Global finance institutions are again under pressure to reform as Africa uses G20 to address the continent’s challenges.
Top of the list is the high debt burden carried by emerging economies, who are slapped with high debt servicing costs.
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This includes South Africa, where at least 20 cents of every rand in revenue is used to service its debt.
This has impacted the country’s social spending, with more money spent on debt than on health and education.
On the sidelines of the G20 finance track meetings in Cape Town on Thursday, former African heads of state launched an initiative calling for a debt relief package for emerging economies.
Nigeria’s former vice president, Yemi Osinbajo, said debt restructuring and lowering the cost of capital were key to addressing Africa’s debt crisis.
"If we are not able to get the cost of capital down, even if we do get debt relief, then we are very quickly back to the debt situation."
Responding to the initiative, Minister of Finance Enoch Godongwana agreed with the calls.
"We must make sure that multinational institutions provide concessional financing for these countries so they should refinance the current expensive debt."
In 2024, South Africa proposed a cost of capital commission for its G20 presidency, which it hopes will reform Africa’s debt structures and reclaim fiscal space.