G20 adopts proposals on debt sustainability
Mbongeni Mguni | Wednesday November 26, 2025 06:00
Debt sustainability is a particularly prickly issue for many countries in Africa, which have complained of unfair treatment by credit ratings agencies, which price their debt at rates far higher than the rest of the world. Many African states are battling with historically unsustainable levels of debt, limited access to concessional lending, and an ever-widening developmental gap with the rest of the world.
Known as the 'African premium', the disproportionately higher interest costs are estimated by the United Nations Trade and Development (UNCTAD) as reaching about $75 billion annually, an amount that robs citizens of other developmental needs, whilst putting countries at high risk in the event of any future economic shocks.
'Africa's growth and development calls for a more deliberate and more decisive action towards debt sustainability on the African continent,' South African President Cyril Ramaphosa said when officially closing the Business 20 (B20) on Thursday.
'Many African countries are unable to invest in their people. They are unable to invest in infrastructure or in productive activity because of the cost of servicing their debt. 'Removing their burden of debt will unleash the potential of many African economies and the contribution that they can make to global growth.'
The B20 serves as the official G20 dialogue forum with the global business community, bringing together business leaders from G20 member countries and beyond.
Ramaphosa noted a report by the Africa Expert Panel chaired by former South African Finance Minister Trevor Manuel, which underscored the same challenge.
'The panel's report highlights the high cost of capital that is faced by African countries, which is higher than in other regions with similar fundamentals. 'It recommends measures to mobilise significantly more concessional funding from multilateral development banks and African trade and finance institutions. 'The report says that we need to address biased risk perceptions of Africa by mandating greater transparency and accountability from predatory organisations or agencies,' the President said.
In its final declaration issued at the weekend leaders summit in Johannesburg, G20 leaders agreed that a high level of debt is one of the obstacles to inclusive growth in many developing economies, which limits their ability to invest in infrastructure, disaster resilience, healthcare, education, and other development needs.
The leaders also acknowledged that many vulnerable low- and middle-income countries face high financing costs, large external refinancing needs, and a significant outflow of private capital.
'These debt vulnerabilities, along with other factors, can constrain their fiscal space, their ability to address poverty and inequality, and their capacity to invest in growth and development,' the declaration reads. 'The situation is particularly challenging for many low-income countries, especially those in Africa. 'We note with concern that interest payments on total external public debt have increased significantly and have more than doubled over the past decade for low-income countries.'
Member states of the G20 collectively account for around 85%, 75%, and 56% of the global economy, international trade, and the global population, respectively.
The G20’s Common Framework for Debt Treatments has previously provided debt treatments to four countries that had requested it, namely Chad, Zambia, Ghana, and Ethiopia.