SA needs to refocus G20 on main global issues – Kganyago

South African Reserve Bank Governor Lesetja Kganyago. SUPPLIED

South African Reserve Bank Governor Lesetja Kganyago. SUPPLIED

Published Jul 11, 2024


South African Reserve Bank (Sarb) Governor Lesetja Kganyago has lamented the extension of the G20 working groups without necessarily dealing with the main agenda for which the bloc was created.

Speaking late last week at the European Central Bank’s Annual Forum on Central Banking in Sintra, Portugal, Kganyago said the G20 had now become a “big industry” with think-tanks for youth, women, labour ministers, and its agenda keeps on adding up while nothing gets dropped.

“The stuff that the G20 was found to deal with, we still have to deal with those… And yet, there is more and more added to the agenda. And I was thinking about the South African agenda as we go into 2025. If the work of the G20 is going to be reduced to negotiating a communiqué, we have a problem,” Kganyago said.

“We are not dealing with global issues that are confronting us. And any country could find one paragraph in the communiqué that they do not like, and we would have no communiqué.

“What is the agenda of the G20? Obviously, this thing has been elevated to the heads of state, which is above my pay grade.”

Kganyago also said the G20 should discuss the impact of sanctions imposed on certain countries as they have negatively affected poorer countries.

“Finance has been weaponised and if you’re cutting people out of key systems, they will find alternatives. I do not think that the economics makes sense but when you start saying to people you are going to be cut out of global finance people will create a different environment, and we must think carefully about whether this is an instrument we wanted to use,” he said.

“I got worried when I had to speak to some reserve managers and they were talking about (that) reserves can be seized. We had better start looking elsewhere. Let’s look at alternative markets. Let’s look at different custodianship and so forth. We are going to have a fragmentation.

“We should continue the work because it is those of us on the fringes of the global financial system who will end up paying the price for the fragmentation.”

South Africa will assume its role in 2025 as president of the G20, the premier multilateral forum for international economic cooperation.

The G20 is a group of 19 countries as well as the African Union and the European Union, representing 85% of the global economy; 75% of world trade; and 67% of the global population.

During its G20 presidential year, South Africa will host a summit of heads of state and governments. It will also be responsible for organising and chairing about 200 meetings of ministers and officials.

These will come from the G20 members, invited countries and international organisations like the International Monetary Fund, and the World Bank.

Rogers Dhliwayo, economics adviser at the United Nations Development Programme South Africa country office, said the country’s forthcoming G20 presidency represents a strategic opportunity to enact significant global change.

Dhliwayo said by harnessing diverse global perspectives and regional insights, the country is uniquely positioned to advocate for policies that tackle immediate challenges and forge paths towards sustainable and inclusive development.

“South Africa should adopt global best practices for inclusive economic recovery, climate change resilience, and health system strengthening. Drawing inspiration from Indonesia, India, Brazil, and insights from the United Nations Summit of the Future, South Africa can promote sustainable growth, digital transformation, and support for small and medium-sized enterprises (SMEs),” Dhliwayo said.

“Increasing climate finance and renewable-energy projects will drive sustainable development. Emulating Brazil and Indonesia in healthcare, with a focus on mental health will bolster health systems. Education and youth empowerment reforms, along with enhanced trade and investment strategies will prepare the workforce and boost competitiveness. Good governance and fostering technology and innovation inspired by global models will ensure comprehensive development,” he said.