South Africa’s G20 presidency goals

The G20, representing 85% of global GDP, 75% of world trade and 67% of the population, provides an influential platform for South Africa to champion developing economies. Under the theme “Fostering Solidarity, Equality, and Sustainable Development,” South Africa aims to address global challenges such as inequality, geopolitical instability and climate change, while prioritising African and Global South interests.

President Cyril Ramaphosa has highlighted these key priorities for the presidency:

• Tackling structural deficits and liquidity challenges: South Africa aims to address high structural deficits and liquidity constraints faced by many developing countries. These efforts include advocating for equitable distribution of financial resources and ensuring that debt restructuring frameworks are accessible to vulnerable economies. These initiatives could help developing nations free up resources for economic growth and infrastructure investment.
• Advocating for fairer sovereign credit ratings: Recognising that credit rating methodologies often disadvantage developing economies, South Africa’s presidency is focused on pushing for transparent and fairer assessment frameworks. These reforms aim to lower risk premiums and borrowing costs, creating a more favourable environment for investment and economic development across the Global South.
• Proposing a “cost of capital commission”:
  The establishment of this commission would address the high cost of capital in developing economies by analysing systemic factors contributing to elevated risk perceptions. The commission would explore reforms in global credit rating practices, debt sustainability mechanisms and alternative financing models to improve access to affordable capital for developing countries.

South Africa’s presidency is well-timed, as the African Union’s admission to the G20 in 2023 underscores the growing recognition of Africa’s economic significance. By focusing on sustainability, transparency, and financial equity, South Africa’s leadership resonates with global priorities such as environmental, social and governance (ESG) and green financing trends.

Driving investment into South Africa

South Africa aims to attract FDI by addressing long-standing structural challenges and promoting economic stability. Key initiatives include:

• Reducing inefficiencies related to government spending and corruption.
• Improving infrastructure to facilitate sustainable economic growth and deliver returns for investors.
• Advocating for fairer global financial policies to reduce the cost of capital.

These initiatives align with global investor expectations, particularly in sectors such as renewable energy and technology, which are poised for growth under South Africa’s leadership.

Boosting corporate deal flow

Proposed reforms under South Africa’s presidency could catalyse activity in the corporate sector, including mergers and acquisitions, joint ventures and public-private partnerships. Addressing credit rating biases and structural inefficiencies could create a more competitive environment for corporate transactions.

By aligning with global trends in green and sustainable finance, South Africa is well-positioned to attract investments in renewable energy, infrastructure and digital technology. These initiatives could enhance investor confidence, driving economic growth and deal flow in the corporate commercial space.

Conclusion

South Africa’s G20 presidency represents a pivotal moment for advancing its economic agenda and fostering corporate growth. By implementing tangible reforms and advocating for fairer global financial practices, South Africa is poised to attract significant investment and boost deal-making activity.

Early positive market reactions and alignment with global investment priorities suggest that South Africa’s presidency is likely to be well-received. This period presents a critical window for South Africa to strengthen its economic trajectory and position itself as a key player in global markets.