By Johnathan Paoli
President Cyril Ramaphosa has called for urgent global action to address unsustainable debt burdens threatening the development prospects of low- and middle-income countries, particularly in Africa.
In his weekly newsletter, Ramaphosa reflected on the outcomes of the 4th Financing for Development Conference in Sevilla, Spain, stressing that achieving debt sustainability was a fundamental requirement for unlocking inclusive and long-term growth.
“Debt can be a tool for development, if it is affordable and spent efficiently on infrastructure and other investments that support growth. However, a succession of external shocks, including the Covid-19 pandemic, the destabilising effect of various conflicts around the world and tightening financing conditions, has caused the cost of debt to rise rapidly for many developing economies,” the president wrote on Monday.
The Sevilla summit, which brought together heads of state, finance ministers and development experts, took place under the shadow of intensifying global crises, from climate disasters and geopolitical conflicts to persistent poverty and rising debt levels.
According to Ramaphosa, the stakes for humanity have never been higher.
It is estimated that the world needs an additional $4 trillion per year to meet the UN Sustainable Development Goals by 2030.
Much of this funding is expected to come from the developing world, but rising debt service costs and tighter global financial conditions have made that increasingly difficult.
Ramaphosa noted that around 3.4 billion people now lived in countries spending more on interest payments than on health and education.
He quoted the Jubilee Commission appointed by the late Pope Francis, which warned that while countries may not be defaulting on loans, “they are defaulting on their people, their environment and their future”.
As the current G20 chair, South Africa has positioned itself as a key voice for Africa and other developing regions.
Early in its presidency, Ramaphosa appointed an Africa Expert Panel, led by former Finance Minister Trevor Manuel, to advise on debt reform strategies for the G20 to champion globally.
Among the panel’s proposals is the improvement of the G20 Common Framework for debt treatments, which has faced criticism for being too slow and opaque.
South Africa is also advocating for innovative mechanisms like climate-resilient debt clauses that automatically pause repayments during climate-related disasters.
“We are focusing on practical solutions to achieve debt sustainability, including ways to expand access to liquidity for countries in financial distress before a full-blown crisis erupts,” the president noted.
Ramaphosa praised past G20 efforts like the Debt Service Suspension Initiative (DSSI), which provided breathing room to low-income countries during the pandemic.
But he warned that ad hoc and reactive responses would no longer suffice in the face of mounting debt pressures.
At the Sevilla conference, participating nations committed to “take concrete actions to enhance fiscal space, address debt challenges of developing countries and lower the cost of capital”.
This political consensus, Ramaphosa stressed, must now be followed by implementation.
That sentiment was echoed at the recent BRICS Leaders’ Summit, where the Rio de Janeiro Declaration called for effective and comprehensive measures to address debt vulnerabilities in both low- and middle-income countries.
“There is no shortage of solutions, what we need is the political will to translate proposals into action and to do so at a scale that matches the size of the challenge,” Ramaphosa said.
The president reaffirmed South Africa’s commitment to global cooperation on debt sustainability and equitable development.
He warned against allowing debt service costs to undermine investment in future generations and said it was time for the international community to move from rhetoric to results.
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