As South Africa takes the G20 helm, it aims to spotlight African economic issues while confronting global geopolitical tensions.
South Africa took on the presidency of the G20 on December 1, 2024, placing the country at the center of this group of the world’s leading economies. While the G20 aims to promote global economic cooperation and development, skepticism about the effectiveness of its initiatives remains. Nevertheless, many view South Africa’s rise to leading the group as critical for the African continent, which is grappling with high unemployment, poverty and inequality.
South Africa’s inclusion in the G20 is a significant opportunity to highlight Africa’s developmental issues on a global stage. As South Africa takes on the presidency, it has the chance to draw attention to the long-standing and historical challenges the continent faces. Its challenge, however, is to ensure the presidency leads to meaningful progress rather than simply rehashing debates already had in other multilateral fora, such as the United Nations and the African Union.
In establishing its priorities for the G20 presidency, South Africa highlighted that the post-Covid-19 landscape poses substantial challenges to African nations’ development and economic integration. As these states strive to recover from the downturn caused by the pandemic, many, including South Africa, have sought assistance from the World Bank, the International Monetary Fund or China to address their economic crises, stoking concerns about long-term reliance on external support.
Heavy reliance on debt financing has left African nations facing significant hurdles as they must address high levels of borrowing that hinder regional development. The repercussions of the pandemic, Russia’s invasion of Ukraine and skyrocketing inflation have forced many African nations to take on additional debt, resulting in some going bankrupt or finding themselves at severe risk of default.
This situation further stifles economic growth, as countries often lack funds to invest in crucial infrastructure projects. Recognizing this, South Africa has made reform of debt development financing a key priority during its G20 presidency, aiming for measures that can address these pressing obstacles.
Before the pandemic, in 2019, African countries allocated an average of 3.7 percent of their gross domestic product to infrastructure, less than South America’s average of 4.4 percent and South Asia’s of 9.1 percent. This partially explains Africa’s widening infrastructure gap compared to other global regions. Insufficient investment in critical sectors, such as transportation or information and communication technologies, has left African states struggling to connect effectively with the global economy.
Consequently, many have been unable to alleviate poverty and economic isolation. This conundrum, however, has historically been a problem for the continent and appears to be an issue that will be difficult to tackle, much less resolve, in the one year of South Africa’s G20 presidency.
Sustainable development and disaster resilience for poorer African nations are essential priorities South Africa seeks to address within the G20 framework. The effects of climate change on the continent are multifaceted: Persistent drought conditions require innovative strategies to modernize agricultural practices and bolster food security; evolving environmental conditions and digitalization of society make the transition to renewable energy generation increasingly urgent to both meet rising energy demands and slow growth in carbon emissions.
South Africa is closely monitoring the severe drought affecting countries in the Southern African Development Community, leading several governments to declare national disasters. In late 2024, Botswana, Lesotho, Malawi, Namibia, Zambia and Zimbabwe officially announced a state of disaster due to the ongoing drought and its harmful effects on agriculture, food security and human lives.
At the G20, South Africa’s government has committed itself to drawing attention to challenges and proposing solutions. The administration of South African President Cyril Ramaphosa recently established an engagement group called Township20. This initiative aims to highlight the unique potential of the township economy, which is specific to the country. It is hoped that Township20 will attract foreign investment into the predominantly informal sectors that thrive in settlements on the outskirts of South Africa’s urban centers.
Revitalizing the township economy in South Africa, which emerged from the exclusion of the vast black majority from legitimate economic opportunities during the apartheid era, has become a key focus in national policy discussions. Solutions reached here could be extrapolated for implementation elsewhere in Africa. Many other African nations share a similar story, where unregulated sectors exist alongside the formal economy. South Africa aims to use the G20 as a forum to raise awareness of the economic potential of informal sectors being integrated into the mainstream economy. If other countries follow suit, Africa could move closer to realizing its full potential, fueling innovation, raising living standards and fostering robust connections with the broader global economy.
South Africa is assuming the presidency of the G20 at a time marked by rising global conflicts, where bilateral relationships increasingly overshadow multilateral cooperation. The ongoing turmoil in the Middle East and Russia’s war in Ukraine have significantly affected Africa’s development efforts, complicated trade and reduced food availability. As a regional economic leader with more advanced infrastructure, South Africa depends greatly on a stable global supply chain, which these conflicts have disrupted.
South Africa is a member of the BRICS bloc, a coalition of countries committed to pursuing a development path that reduces reliance on the United States and Europe. Initially, the BRICS included Brazil, Russia, India, China and South Africa, and in 2024, the group expanded to include Iran, Egypt, Ethiopia and the United Arab Emirates. Indonesia joined the ranks in early January of this year, and Saudi Arabia has also been invited, though it has not yet formally accepted. Still more countries seek membership. Yet Pretoria’s close relationships with certain BRICS members antagonistic to the U.S. and Europe, such as Russia and Iran, have shone a negative spotlight on South Africa, raising concerns about the country’s commitment to democracy.
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This also leads to discussions of South Africa’s potential isolation from crucial economic and development partners, such as the U.S. and the European Union. Due to its connections with countries like Russia and Iran, Pretoria has found itself in a position where it frequently must clarify these associations, which has strained its relations with its development partners.
Economic cooperation is becoming difficult to separate from security cooperation, with the latter somehow overshadowing the former. This reality must be factored in as South Africa assumes the presidency of the G20. Despite its non-alignment stance in global conflicts, South Africa is entangled in global disputes, sidestepping its focus on the development agenda.
× Likely: Conflicting pressures from major powers distract from Africa’s development goals The G20 presidency is an opportunity for South Africa to draw attention to areas it considers globally relevant, and may position Africa as a future catalyst in the multipolar world economic order. Nevertheless, Africa is increasingly becoming a proxy stage for geopolitical tensions playing out among major powers. Russia is seeking to replace France as the main security partner for Sahel nations, China is competing with the U.S. and EU for development heft around the continent, and the Gulf states are picking favorites among developing African countries. The result is that African states view the current activities of major powers as neocolonialism that is a distraction from addressing core African challenges. As South Africa steps into the presidency, it finds itself in uncharted territory. This role brings chances to advance the region’s development agenda, as well as the risk of missed opportunities if not carefully navigated. Therefore, balancing the interests of competing global powers while prioritizing Africa’s development agenda will be challenging. To successfully meet its objectives, South Africa’s G20 presidency must skilfully navigate compromises among member states, particularly regarding differing perspectives on Russia’s war in Ukraine and the Middle East conflicts. The presidency will strive to ensure that these contentious issues do not detract from essential discussions important to developing economies. Furthermore, the return of Donald Trump to the White House could heighten political uncertainty, as he has proposed increasing tariffs on imports from China and traditional U.S. allies. For South Africa, Mr. Trump’s threat to impose 100 percent tariffs on BRICS nations, including South Africa, should they pursue a joint currency independent of the U.S. dollar, is especially worthy of consideration. The U.S. is expected to be more actively engaged during Mr. Ramaphosa’s G20 presidency than many other member countries, particularly since it will assume the presidency following South Africa in 2026.
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