The Group of Twenty (G20), which brings together the world’s largest economies, faces a renewed test of its ability to respond to debt crises in developing nations as the United States assumes the bloc’s rotating presidency. The handover ends a four-year cycle led by emerging economies — Indonesia, India, Brazil and South Africa — during which concerns over debt sustainability in the Global South took centre stage.
According to Reuters, total debt accumulated by emerging economies has surpassed USD 100 trillion, based on international estimates, putting increasing pressure on multilateral financing mechanisms. Across Africa, the situation is even more acute, with the International Monetary Fund warning that around 20 countries are either at high risk of debt distress or already in it.
During its tenure, South Africa sought to revive discussions on debt restructuring, managing to secure G20 finance ministers’ approval of a Ministerial Declaration on Debt Sustainability — the first since the start of the pandemic. However, concrete progress remains limited. Launched in 2020, the G20’s Common Framework has so far provided debt treatment for only four countries: Chad, Zambia, Ghana and Ethiopia.
Cases such as Senegal — where the discovery of undisclosed debt led the IMF to suspend a USD 1.8 billion financing programme — expose weaknesses in the system. Mozambique has already opened consultations for a possible restructuring, while Malawi faces debt levels approaching 90% of GDP. Gabon has recently resorted to passive debt-management operations, including bond swaps totalling around USD 1 billion.
Trevor Manuel, former South African finance minister and chair of the African Advisory Panel to the G20, argues that “structural solutions, not incremental adjustments,” are needed. His view is echoed by Vera Songwe, economic adviser to President Cyril Ramaphosa, who calls for revisions to the debt-sustainability framework and reforms to multilateral development banks’ guarantee systems, urging changes to Basel rules to reduce borrowing costs for poorer nations.
Eric LeCompte, executive director of Jubilee USA Network, acknowledges the limitations of the Common Framework but believes the new U.S. presidency can provide continuity to South Africa’s priorities — including economic growth, job creation and poverty reduction. He also highlighted the launch of the G20–Africa Cooperation Framework in October as one of the most tangible achievements of the outgoing presidency.
For Gilad Isaacs of South Africa’s Institute for Economic Justice, deeper reforms are needed: “The G20 has no legal authority and does not set binding policy. We will need to seek other venues where these changes can be driven.” He suggested the creation of a joint platform of borrower countries as an emerging proposal.
With the United States set to lead the G20 until late 2026, attention now turns to Washington’s ability to keep developing countries’ concerns on the global agenda amid persistent inequalities and rising risks of financial instability.
