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President Cyril Ramaphosa looks on during the 55th annual World Economic Forum meeting in Davos, Switzerland, January 21 2025. Picture: REUTERS/YVES HERMAN
President Cyril Ramaphosa looks on during the 55th annual World Economic Forum meeting in Davos, Switzerland, January 21 2025. Picture: REUTERS/YVES HERMAN

President Cyril Ramaphosa called on the multilateral finance institutions of the global community to reform their practices and allow emerging economies to access development finance on fair terms.

Ramaphosa was addressing the World Economic Forum (WEF) meeting in Davos, Switzerland. He took the opportunity to tout SA’s government of national unity, Eskom’s suspension of load-shedding for nearly 10 months and the country’s presidency of the Group of Twenty (G20).

He said that when SA took over the presidency of the G20 this year, the government would ensure the meeting focused on the three themes of solidarity, inequality and sustainable development.

“These themes can best be taken forward through the collective actions of a number of institutions like the G20 as well as various multilateral organisations such as the UN, the World Trade Organisation, the World Health Organisation, financial institutions of the world, some of which should be reformed and be made more representative and more responsive to the needs of the citizens of the world.

“We will seek to get the G20 to focus more on how we can enhance solidarity through collective efforts to make sure that in the pursuit of progress in the world, and progress for all, no person and no country should be left behind.”

President Cyril Ramaphosa in Davos, Switzerland, January 21 2025. Picture: REUTERS/YVEW HERMAN
President Cyril Ramaphosa in Davos, Switzerland, January 21 2025. Picture: REUTERS/YVEW HERMAN

This is not the first time Ramaphosa has urged established multilateral organisations to approach Africa and other emerging economies more fairly when it comes to matters of development finance.

At the height of the Covid-19 pandemic and global lockdown, SA was granted a $4.3bn loan from the IMF at a rate of 1%, which took the government’s debt exposure to R3- trillion at the time.

Ramaphosa said one of the greatest impediments to achieving greater levels of growth, development and stability around the world was the persistence of inequality within and between nations.

“The pursuit of the UN sustainable development goal on reducing inequality is as much an economic imperative as it is a social imperative. As the G20, we need deliberate as well as co-ordinated effort to focus on inclusive growth based on responsive trade and investment to grow the incomes of poor countries and the poorest in society.”

He warned debt sustainability for low-income countries was one of the four main priorities of SA’s presidency of the G20 in 2025. Ramaphosa urged developed economies to be mindful of their conduct where it relates to energy consumption as this also affects developing countries.

“In addition to huge gaps in economic capabilities and levels of human development, countries in the Global South face a lack of predictable finance in development as well as climate change. They also face high levels of debt and they are vulnerable to pandemics.”

The president said mobilising finance for the just energy transition was another priority for SA at the G20, even calling out the steep rates developing economies had to pay for loans, leaving them in long-term debt cycles.

“It is simply, in our view, not fair that over 60% of special drawing rights go to a handful of wealthy countries and these drawing rights should be redirected to enable countries in Africa and other parts of the Global South to realise their developmental aspirations, to enable them to invest in infrastructure, in industrial development, in education and training and healthcare.

“We need to leverage private capital and use innovative forms of finance, as well as taxation, to raise additional resources for sustainable development in various countries in the Global South. Global finance institutions should help to derisk and support more financing for emerging and developing countries.”

Speaking to Bloomberg in Davos earlier on Tuesday, SA Reserve Bank governor Lesetja Kganyago warned one of the risks the global economy showed was a fragmentation of the global economy in which developed countries take protectionist measures, which would be negative for global trade.

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