President Cyril Ramaphosa. (Photo: by PresidencyZA)
President Cyril Ramaphosa says South Africa will use its G20 presidency to press for reform of the global financial architecture, including measures to promote debt sustainability for developing economies.
In his weekly newsletter on Monday, Ramaphosa warned that the burden of sovereign debt repayments, particularly in Africa, is stifling public spending and widening inequality.
Ramaphosa made the comments after being handed a report last week by the G20 extraordinary committee on global inequality, chaired by Nobel laureate and economist Joseph Stiglitz, which examines how debt and austerity have become structural drivers of inequality and pandemic vulnerability.
He said the committee’s findings echo the position of South Africa — which holds the G20 presidency this year — that inequality is not only a social or moral problem but an economic risk.
“Interest on sovereign debt repayments, especially in Africa, is stifling public spending and economic growth,” he wrote. “It is widening the gap between countries and within countries.”
Ramaphosa said the G20 must urgently address the fiscal conditions that have left low- and middle-income countries unable to build resilience or recover from shocks.
“We are using our G20 presidency to advocate for reform of the global financial architecture,” he said, calling for multilateral development banks to adopt an “inequality-reducing agenda”.
Last week’s Global Council on Inequality, Aids and Pandemics report warned that the next pandemic will be fuelled not by viruses but by debt, austerity and collapsing public budgets. The council, convened by the United Nations Programme on HIV and Aids (UNAids), is co-chaired by Stiglitz alongside Winnie Byanyima, Monica Geingos and epidemiologist Michael Marmot.
“The more unequal a society is, the deadlier and longer a pandemic becomes,” Byanyima said at the launch in Johannesburg. “Inequality makes us more vulnerable to disease outbreaks and traps us in a vicious cycle. Pandemics do not level us. They expose us.”
Stiglitz told the same gathering that fiscal constraints are now a public health risk. “If you don’t have resources, you can’t prevent diseases from spreading,” he said. “Austerity doesn’t stabilise economies. It prepares them to fail again.”
Ramaphosa said the G20 expert committee’s work shows that inequality is a “policy choice”. The report calls for an international panel on Inequality, modelled on the Intergovernmental Panel on Climate Change, to measure and monitor inequality trends and advise governments and multilateral institutions on policy interventions.
“This will be the first time the G20 considers an in-depth report of this nature,” Ramaphosa said. “It is critical that G20 leaders recognise the extent and urgency of the problem of inequality, and that they act accordingly.”
The president said the report’s recommendations align with South Africa’s domestic approach, citing policies such as progressive taxation, minimum wage legislation, public healthcare and social protection.
At last week’s launch, Health Minister Aaron Motsoaledi said South Africa’s experience underlines the report’s warnings.
“We have two health systems, one for the wealthy and another for the majority,” he said. “A pandemic does not respect that divide. It punishes it.”
The report also identifies market concentration, monopolies, and anti-competitive business practices as major drivers of inequality and proposes national inequality-reduction plans with measurable targets.
Ramaphosa said the challenge now is for world leaders to match evidence with political will, writing: “Inequality is one of the most pressing global issues of our time.
This report provides a credible blueprint for the actions we need to take to overcome it.”
The annual G20 leaders’ summit scheduled for Johannesburg next month will mark the first time the bloc debates inequality as part of its economic and financial mandate.
Whether the issue becomes part of the G20’s permanent agenda may determine whether South Africa’s presidency succeeds in shifting the conversation from principle to policy.