In a speech at the G20 Finance Ministers' meeting at the end of February, South African President Cyril Ramaphosa suggested that filling the huge inequality gap between developing and developed countries will create a more prosperous world. “As the G20, we need intentional and coordinated efforts to focus on inclusive growth based on corresponding trade and investments to grow incomes in poor countries and increase incomes for the poorest people in society.
Therefore, addressing inequality is the main pillar of South Africa's G20 revolving presidency, and in addition to the intergovernmental forum of the world's richest countries, the European Union (EU) and the African Union (AU). This year marks the first time the summit has been held in African soils, providing the continent with the opportunity to highlight its own priorities.
Pretoria has elevated four key themes under the presidency. We are increasing disaster resilience and response, especially in poor countries that cannot afford recovery. Debt sustainability in low-income countries. Mobilize funds for Just Energy Transition. harnesses key minerals for inclusive growth. However, analysts question how South Africa can move its agenda forward without the participation of a high-level US representative who has pledged not to attend a particular meeting.
On February 5th, Secretary of State Marco Rubio announced on X (formerly Twitter) that he would not attend the Foreign Ministers Summit. He dismissed South Africa's G20 goal as anti-American.
“I will not attend the G20 summit in Johannesburg. South Africa is doing very bad things. We will expropriate private property. We will use the G20 to promote “solidarity, equality, sustainability.” That is, DEI and climate change.
Since then, diplomatic relations have worsened from evil, and Rubio declared in March the US ambassador for “Persona Non Grata” by Ebrahim Lasor (pictured by) the South African ambassador for US Ebrahim Lasor (in g.), “Persona Non Grata.”
Menzi Ndhlovu, senior analyst at Consultant Signal Risk, tells African Business that the G20 is a limited forum without US support. “Looking at the global financial structure, America remains the largest consumer, the largest donor and the most influential actor in organizations deployed by the G20 agendas, such as the IMF, World Bank, and WTO.
Elizabeth Sidiropoulos, CEO of the South African Institute for International Studies (SAIIA), believes that South Africa must focus on what the Forum can achieve without the US. She says there are areas where progress can be made and there are areas where the absence of the US is much more keen.
“The specific reforms of the IMF and World Bank, where the US has a veto, and the World Trade Organization's trade dispute resolution system, are regions that cannot be expected to make any progress at this time,” she says.
Can the G20 work in the US?
However, the areas where South Africa can make viable progress is reforming climate change and global governance institutions, adds Sidiropoulos.
“South Africa can work to maintain a climate change consensus even when the world's second-largest emitter is not on the table.
“There are several ways that the IMF can drive changes. For example, we can suggest reducing the additional fees that the IMF charges borrower countries that can make a big difference to these countries.”
Mohamed Kashimiji, a former South African diplomat currently working as a geopolitical consultant, has told African businesses that the issues South Africa proposes may not have a full consensus by the end of the presidency, but he still says it is important to present the conversation.
“South Africa's first victory is putting Africa and its issues on the agenda and its issues, and the global South. From a real deliverable perspective, they tend to come a little later,” he says.
Access to finance is important for developing countries. For South Africa, for example, they aim to move away from reliance on coal, move towards cleaner energy production, and deal with extreme weather events.
But the ambitious finances Ramaphosa demands to tackle inequality may be difficult to obtain with the changing world order promoted by the new skeptical White House administration. In March, the US decided to cut loans from the multi-billion-dollar Energy Transition Partnership (JETP), an international agreement that supports the transition from coal to clean energy in South Africa. While other supportive countries may cover the shortage, Ndhlovu believes that rich countries may become more reluctant to provide funding in the US presence.
“Europe is not in a position to effectively reduce the funding gap. Frankly, they are in panic at this point because they need to mobilize money for defense. China's economy is not as good as it was 10 years ago. They have other players, but I don't think we can fill the vacuum left at this point,” he says.
Nevertheless, Sidiropoulos believes there are areas where Africa can improve its financial position without the need for reforms across the G20.
African countries have long complained about the perceived bias of established credit rating agencies towards Africa.
According to a 2023 report from the United Nations Development Programme, African countries could save up to $74.5 billion if credit ratings were determined using more objective criteria.
Currently, the AU is planning to launch its own credit rating agency, the African Credit Rating Agency (AFCRA), in the second half of 2025.
“Hedge funds and other financiers still have to believe in these credit ratings. This is not a natural conclusion, but what they can do is force established institutions to consider AU methodology, which could create opportunities to reform the system.”
Revival of global competition
Elsewhere, there have been many talks from African leaders about working together through the G20 and other forums to capitalize on the continent's important mineral wealth.
But Christopher Vandome, a senior researcher at Chatham House, says finding a consensus is a challenge here too. “The reality is, I think we'll start seeing competition between countries again. They go to all the peaks and talk about industrialization in the region, but when that happens, if they have a bilateral approach to their own country's particular things, they'll want it.”
Sidiropoulos believes there is a real risk of fragmentation in Africa in a world where geopolitical tensions are rising. “When you are in a time of uncertainty, your survival instinct begins as a country and is at a very realistic risk of fragmentation. We have already seen “the rubber ring of news that the US and DRC have announced their openness to important mineral trade.”
She says Africa needs strong leadership and needs to accelerate economic initiatives through the G20. With that in mind, the forum promises to be both an opportunity and a challenge for Ramaphosa at the global stage.
“At this critical time, we need for visionary leaders who can form the continent. Industrialization and building value chains does not happen overnight. We need to accelerate this economically through the African Continental Free Trade Area. The work is there, but it requires political will.”
