Final week, the G20 Finance Ministers and Central Banks Governors gathered in Sao Paulo, Brazil. On the agenda was a mess of points, together with the reforms of the worldwide monetary structure, the state of the worldwide financial system, meals safety, growth and fairness, commerce and funding, local weather change, vitality transition, the digital financial system, amongst many others. In the middle of 2024, the Brazilian G20 Presidency has scheduled a total of 120 meetings earlier than it arms over the Presidency to South Africa.
2024 is the primary 12 months that the African Union is collaborating as a everlasting member. The just-concluded African Union Summit in Addis Ababa, Ethiopia offered key steering on the method of establishing the help construction across the AU’s participation within the G20. This course of can be topic to additional discussions amongst African Union member states. However the G20 agenda is shifting ahead and seizing this chance to already put ahead AU proposals is essential.
In order a newcomer into the group, what are the important thing points that the AU representatives can advocate for?
First, the AU can play an essential position to advocate different G20 members to double efforts to deal with the problem of debt misery in lots of low- and middle-income nations and handle liquidity challenges head on. Whereas of their conferences in India final 12 months, the finance ministers recognised the necessity to “step up the implementation of the [G20 Common Framework for Debt Treatment beyond the DSSI] Widespread Framework in a predictable, well timed, orderly and coordinated method”, progress on this agenda may very well be ramped up. Not solely is there a must assessment the method to keep away from a state of affairs confronted, for instance by Zambia, which negotiating below the framework lasted three years earlier than it secured a breakthrough, however there’s additionally a must strengthen the pre-emptive motion capability of the Widespread Framework in conditions of illiquidity.
Due to this fact, the AU, might play a job in calling for a time-bound assessment on the Widespread Framework. Such a assessment, led by a mixture of specialists and finance ministry officers from affected nations and different G20 representatives, would discover avenues to make sure that negotiations below the framework are carried out transparently and inside cheap timelines. The assessment might additionally discover avenues to leverage debt remedy below the G20+ to deal with the problem posed by personal collectors and outline steering or proposals on the way to have interaction them in addition to worldwide finance establishments.
Second, the African Union Summit deliberations flagged a number of considerations by African nations relating to the reforms of the worldwide monetary structure. Within the speedy future, the AU can construct on its work and mainstream it into the G20. A concrete motion by the AU could be to safe the G20 backing and engagement in good religion to take ahead the African Group-sponsored decision on the “Promotion of inclusive and efficient worldwide tax cooperation on the United Nations” via the negotiations for a UN tax conference. At a time when tax assortment is rising as a key route for financing the longer term, it is crucial that the governance of collected taxes is constructed to make sure that the taxes are useful quite than cumbersome for the typical African.
Moreover, on the AU Summit, leaders insisted on the necessity to channel a transparent African place on the upcoming replenishment of IDA. An bold replenishment is essential, however it’s going to admittedly face the fact of an rising variety of G20 members chopping down their growth finance commitments in addition to uncertainty over the place of the US Congress in a pre-electoral interval with heightened tensions. A decline could be in keeping with the pattern seen since its peak in 2012. Nonetheless, the AU could make the case, based mostly on the expertise of its member states and the necessity for concessional funding as offered by IDA that an bold replenishment is essential.
Third, Africa’s fiscal challenges will more and more come up from commerce shocks. Discussions on inequality and growth can subsequently not be indifferent from commerce. The position of the AU, together with via the essential position of the Sherpa in driving this message house culminating in clear language on the finish of the 12 months is essential. Completely different climate-labelled commerce measures are more and more being launched by G20 members with forecasted destructive impacts on African nations. The European Carbon Border Adjustment Mechanism is for instance anticipated to lead to a $25bn/12 months loss for the continent. Final 12 months, the G20 leaders already famous that, “inexperienced financial system insurance policies, together with unilateral ones, shouldn’t represent a way of arbitrary or unjustifiable discrimination or a disguised restriction on worldwide commerce”. The COP28 conclusions, largely because of a push by nations like Brazil with the help of African nations and others, have reiterated this message. The AU ought to argue, on the degree of the G20, for the duty drive on commerce to additionally present particular suggestions on this challenge to make sure that not solely the precept of fairness is revered however that the G20 really performs the position of a platform the place the financial wellbeing of its members is secured.
The Brazilian Presidency of the G20, adopted by the primary G20 conferences on African soil, in South Africa in 2025, current the AU with a possibility to seed concepts on its ambition on the G20. After the focussed and profitable marketing campaign to safe a seat on the desk, it’s time for the continent to contribute to the menu.
Supply: african.business
