South Africa’s G20 Sherpa, Zane Dangor, yesterday told the first G20 Sherpa finance and central bank deputies’ meeting that geopolitics should not hold back discussions on substantive issues.

“South Africa is the fourth consecutive emerging market country to host the G20 and we will build on the work that our predecessors have done,” he said.

In particular, Dangor praised the work that Brazil, the previous host of the G20, had done in terms of food security.

He said South Africa’s G20 Presidency would focus on three areas: inclusive economic growth, food security and its impact on inequality and poverty, as well as Artificial Intelligence.

“We expect to receive excellent recommendations from the 15 working groups and we will share the minutes of these meetings at a later stage. The Sherpas will help shape the language of the joint declaration that will be agreed to by all,” he said.

The Sherpa Track had 15 working groups. These were agriculture, anti-corruption, culture, development, digital economy, disaster risk reduction, education, employment, energy transitions, environment and climate sustainability, health, research and innovation, tourism, trade and innovation, and finally, women empowerment.

Duncan Pieterse, the director general of National Treasury, said South Africa’s G20 Presidency would focus on emerging market economies, especially those on the African continent.

“Although international agencies expect stable economic growth next year, for many countries that will be insufficient to reduce poverty,” Pieterse said.

“We will also be looking at debt sustainability and how debt restructuring could improve liquidity. That is why we will be promoting local currency debt markets.”

The World Bank’s latest International Debt Report showed that developing countries spent a record $1.4 trillion (R25trl) to service their foreign debt as their interest costs climbed to a 20-year high in 2023.

Higher interest rates meant that servicing that debt surged by nearly a third to $406 billion, squeezing the budgets of many countries in critical areas such as health, education, and the environment.

On average, interest payments of International Development Association (IDA) countries now amount to nearly 6% of the export earnings of IDA-eligible countries - a level that has not been seen since 1999. For some countries, the payments run as high as 38% of export earnings.

Pieterse said a particular focus of South Africa’s G20 Presidency would be on closing the financing gap for the climate transition, which was estimated to need $4trln annually.

“There will be an investment push with events in Cape Town in February and in Spain in June to launch climate finance instruments so that no one is left behind,” he said.

President Cyril Ramaphosa, in his briefing to the media on the G20 Presidency earlier this month, mentioned that a key focus area would be to mobilise finance for a just energy transition.

“We will seek to secure agreement on increasing the quality and quantity of climate finance flows to developing countries,” Ramaphosa said.

“This would include strengthening multilateral development banks, enhancing and streamlining support for country platforms such as the Just Energy Transition Partnership and more effectively leveraging private capital.”

Negotiators at this year’s United Nations climate summit, known as COP29, held in Baku, Azerbaijan, struck an agreement to help developing countries adopt cleaner energy and cope with the effects of climate change.

Under the deal, wealthy nations pledged to reach $300bn per year in support by 2035, increased from the current target of $100bn.

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