Latest news with #AfricaDevelopment
Zawya
26-06-2025
- Business
- Zawya
South Africa: A fairer capital cost for emerging markets will be a boon for global economies
South Africa's 2025 presidency of the G20 comes at a moment of global instability. Volatility in financial markets, escalating geopolitical tensions, and chal- lenges to multilateralism have heightened the stakes for international cooperation. For South Africa, the first African nation to lead the G20, the challenge is immense – but so is the opportunity. President Cyril Ramaphosa has pledged to use the G20 to elevate the development priorities of Africa and all lower middle income countries. Central to these pri- orities is the urgent need to address the prohibitively high cost of capital. This is not merely a technical issue; it is a structural challenge that limits the ability of governments and businesses to invest in people, build resilience to cli- mate change and compete in the global economy. By tackling this issue head-on, South Africa has the potential to redefine the global financial architecture in ways that benefit not only Africa but the entire developing world. A crisis rooted in inequity In the decade leading up to 2022, Africa's debt stocks more than doubled, rising from $283bn to $655bn. Private creditors and multilateral institutions accounted for the largest increases in 2023, accounting for 38% and 35% of Africa's debt stocks respectively. In the same year China ac- counted for 12.4%. This debt accumulation was a logical response to historically low interest rates and the continent's massive infrastructure needs. For many African nations, borrow- ing was not reckless but necessary. However, the Covid-19 pandemic changed everything. As revenues from tourism and remittances collapsed, and government expenditures rose to man- age the health crisis, debt sustainability deteriorated. Meanwhile inflation, fuelled by excessive stimulus and global shocks such as the war in Ukraine, has further strained public finances. Central banks' rapid interest rate hikes – intended to stabilise inflation – have increased the cost of dollar-denominated debt, driving several nations to the brink of default. Today, 23 out of 40 African nations as- sessed by the World Bank are at high risk of debt distress or are already in distress. Half of the $102bn in debt service paid by African countries in 2024 went to private creditors – and this debt has become ex- pensive. African countries pay an average premium of 500% on private loans com- pared to the rates offered by institutions like the World Bank. In 2021 for $1bn in loans, Africa's lower middle income countries paid an average of 5.79% to private creditors and 1.16% to the World Bank, while upper middle income countries paid 5.92% to private creditors and 0.5% to the World Bank. This disparity has devastating consequences. Between 2016 and 2021, the excess inter- est costs associated with these premiums amounted to $56bn – funds that could have transformed health systems, im- proved infrastructure, or enhanced edu- cational opportunities. Global implications The high cost of capital in Africa is not just an African problem. It reflects structural challenges in global finance that limit the ability of developing countries to partici- pate fully in the global economy. For example, African leaders have long argued that African countries face unfavourable credit ratings from agencies like Moody's, S&P Global and Fitch – ratings that fail to accurately reflect the region's economic potential or the resilience of its governments. While the agen- cies are making their methodology more transparent, more is needed. Prudential regulations introduced to protect the banking system after the 2008 financial crisis – embodied in the Basel III framework – play a role in inhibiting private investment in emerging markets by increas- ing the requirements on investors' capital liquidity ratios, despite the fact that these investments pose no structural risk to the banking system. And finally, a paucity of data and do- mestic regulations can increase these costs. By bringing together these disparate agendas, the G20 can lay out a roadmap for addressing these challenges across the various regulatory and market-based agendas that need reform. South Africa's G20 leadership matters As the premier forum for international economic cooperation, the G20 is unique- ly positioned to address the structural factors driving the high cost of capital. Representing 85% of global GDP, 75% of international trade, and 64% of the world's population, the G20 wields significant influence over global financial norms and practices. President Ramaphosa has already out- lined an ambitious agenda, including pro- posing the establishment of a Cost of Capi- tal Commission. This would bring together experts from across the public and private sectors to address the root causes of high borrowing costs for developing countries. It would examine credit rating methodolo- gies, prudential regulations, and the data gaps that exacerbate risk perceptions. This proposal builds on successful G20 finance initiatives, such as the Debt Ser- vice Suspension Initiative (DSSI) launched during the pandemic and an Independent Expert Group (IEG) that was commissioned by the Indian G20 presidency to address reform of the multilateral development banks. The Cost of Capital Commission could provide the technical expertise and political momentum needed to advance these solutions. Building coalitions for change South Africa is not alone in recognising the need for reform. Key G20 members, including Brazil, India and Indonesia, have emphasised similar priorities during their presidencies. The African Union, which now holds a permanent seat at the G20 table, also provides a critical platform for advancing African interests. Moreover, informal coalitions such as the Bridgetown Initiative and the Paris Pact for People and Planet have already laid the groundwork for multilateral coopera- tion on financial reform. By aligning its G20 agenda with these initiatives, South Africa can build a broad- based coalition of support, bridging divides between traditional powers like the G7 and emerging blocs such as BRICS. This collaborative approach will be es-sential for managing the geopolitical ten- sions that often complicate G20 negotia- tions. At the same time, the legitimacy of the G20 framework – rooted in its diverse membership and economic clout – pro- vides a powerful mandate for action. A global imperative Addressing the high cost of capital is not just an African priority; it is a global im- perative. Emerging economies face an estimated $2.3trn to $2.5trn in annual financing needs to meet climate goals and achieve sustainable development by 2030. Without access to affordable capital, these goals will remain out of reach, ex- acerbating inequalities and undermining global stability. For advanced economies, the stakes are equally high. The economic health of emerging markets directly affects global trade, investment, and financial stability. By addressing the cost of capital, the G20 can unlock new opportunities for growth and innovation, benefiting both devel- oped and developing nations. Seizing the moment South Africa's G20 presidency is a chance to turn the tide on one of the most pressing challenges of our time. By championing the estab- lishment of a Cost of Capital Com- mission and building coalitions for change, South Africa can help create a fairer, more inclusive global finan- cial system. This is not just an opportunity for Africa – it is an opportunity for the world. By addressing the structural inequities in global finance, the G20 can lay the foundation for a more resilient, equitable, and sustainable global economy. As the first African nation to lead the G20, South Africa has the moral authority and political leverage to push this agenda forward. The stakes are high, but so is the potential for transformative change. Now is the time to act. n David McNair (above left) is executive di- rector at the ONE Campaign, a member of the European Council on Foreign Relations, and author of 'Why Europe Needs Africa,'published by the Carnegie Endowment for International Peace. Vera Songwe (above right) is a non-resident senior fellow in the Africa Growth Initiative at the Brookings Institution. She is Chair of the Board of the Liquidity and Sustainability Facility and sits on South Africa's Presidential Economic Advisory Council (PEAC). The G20 is uniquely positioned to address the structural factors driving the high cost of capital. © Copyright IC Publications 2022 Provided by SyndiGate Media Inc. (
Mail & Guardian
07-06-2025
- Politics
- Mail & Guardian
It's time to talk about weaponising visas against Africans
The anti-migration regulations in Europe and the US against Africans continue to affect the sociopolitical and economic development of Africa. Thousands of Africans who apply for visas continue to have their applications rejected. Moreover, most Africans are charged exorbitant non-refundable fees when applying for visas. Millions in foreign and local currencies are accumulated by European and US embassies in various African countries from visa applications annually. African visa applicants face more severe restrictions compared with applicants from other regions, resulting in a disproportionately high rejection rate. In 2022, Africa topped the list of rejections with 30% or one in three of all processed applications being turned down, even though it had the lowest number of visa applications per capita. Africa accounted for seven of the top 10 countries with the highest Schengen visa rejection rates in 2022: Algeria (45.8%), Guinea-Bissau (45.2%), Nigeria (45.1%), Ghana (43.6%), Senegal (41.6%), Guinea (40.6%) and Mali (39.9%). The situation has become worse over the years as economic instability and conflicts continue to rage in most African countries. Some African countries have started calling for visa reciprocity against travellers from Europe and the US. The US and most European countries do not require visas to enter African countries. According to Justice Malala, a South African political analyst, in May, Namibia unveiled measures to impose entry visa requirements to more than 30 countries that have not reciprocated its open visa regime. Nigeria has threatened to impose the same measures. In the run-up to the French election earlier in July, a Chadian official told France's Le Monde newspaper that if incoming leaders block visas for Chadians, 'we will apply reciprocity'. Zambia's President Hakainde Hichilema recently raised the issue of non-refundable visa fees in his country, demanding the rules on non-refundable fees be re-examined and the visa application fees be refunded to Zambians whose applications are rejected. If his demand is accepted, this must apply to all African countries. According to European states, most rejections are based on 'reasonable doubts about the visa applicants' intention to return home'. Many Africans believe otherwise. They claim that African visa rejections are weaponised against Africans to deprive them of voices at critical political and socio-economic gatherings on global matters such as climate change, artificial intelligence, human trafficking in Europe and the US. These discussions eventually become policies that affect Africa. An increased number of leading Africans on these subjects continue to have their applications rejected. These do not sound like people who present 'reasonable doubts about the visa applicants' intentions to return home'. African News reports that African governments are building partnerships with Europe across sectors, trade, education, and technology. But the barriers to movement stand in stark contrast to the rhetoric of cooperation. The rise of right-wing politics in many parts of the world has also further complicated matters for African visa applicants. Pressure from far-right parties who are in power in half a dozen member states in Europe are outdoing each other in introducing tough anti-immigration measures. US President Donald Trump has just imposed travel bans on 12 countries, of which seven are African — Chad, Congo-Brazzaville, Equatorial Guinea, Eritrea, Libya, Somalia and Sudan. Travel restrictions will be imposed on people from Burundi, Sierra Leone, and Togo. Even before this measure, Trump's anti-migration political campaign and his subsequent extra-judicial expulsion of immigrants without due process now that he is in power has emboldened right-wing anti-migration politics throughout the world. The victory on Monday of the nationalist historian Karol Nawrocki in Poland's presidential election is one case in point. Nawrocki is an admirer of Trump who support by calling for tighter immigration controls and championing conservative social values in the EU. The BBC reports that Trump's administration can temporarily revoke the legal status of more than 500,000 migrants living in the US, the US Supreme Court ruled recently. The ruling puts on hold a previous federal judge's order stopping the administration from ending the 'parole' immigration programme, established by former president Joe Biden. The programme protected immigrants fleeing economic and political turmoil in their home countries. The new order puts roughly 530,000 migrants from Cuba, Haiti, Nicaragua and Venezuela at risk of being deported. It is not just the rejection of visa applications that is troubling; the non-refundable visa application fees continue to negatively affect applicants' financial status. According to the London-based research and arts organisation LAGO Collective, African countries have lost an estimated $67.5 million in non-refundable Schengen visa application fees since 2024. Africans find themselves going against the tide in a globalised world where mobility equates to opportunity. They are finding themselves locked out 'not because they lack intention or preparation, but because the system increasingly seems stacked against them'. This matter deserves a wider discussion, preferably at the African Union. The visa rejections of Africans are not only about Africans overstaying their allowed time in Europe and the US. It is about Europe and the US continuing with business as usual, particularly at multilateral level, where binding discussions without the involvement of Africans are taken. This is particularly the case regarding rare earth minerals and other metals essential to new technologies. Thembisa Fakude is a senior research fellow at Africa Asia Dialogues and a director at the Mail & Guardian.
News24
02-06-2025
- Business
- News24
Africa to get most of Bill Gates' $200bn in next 20 years
For more financial news, go to the News24 Business front page. Africa is set to be the largest beneficiary of the $200 billion (R3.6 trillion) that the Gates Foundation plans to give away over the next two decades, co-founder Bill Gates said. 'The majority of that funding will be spent on helping you address challenges here in Africa,' he told an African Union gathering in Addis Ababa, Ethiopia, Monday, according to an emailed statement from his foundation. The organisation said last month that it plans to give away the money over 20 years before shutting down in 2045. That implies Gates — currently the fifth-richest person in the world — plans to transfer many billions to his foundation as part of a goal to give away 99% of his wealth. He's currently worth about $175 billion, according to the Bloomberg Billionaires Index. The foundation has disbursed more than $100 billion since it was co-founded by Gates and Melinda French Gates in 2000. Originally, the foundation was set to close 20 years after the Microsoft co-founder's death.
Zawya
30-05-2025
- Business
- Zawya
Curtain falls on African Development Bank Group 2025 Annual Meetings, New President Elected
Nigeria provides $500 million to extend the Nigeria Trust Fund for another 15 years 'It has been the greatest honour of my life to serve as president of the African Development Bank Group and to serve Africa '– Dr. Akinwumi Adesina The African Development Bank Group's 2025 Annual Meetings ( closed on Friday with a plenary session, following five days of meetings and discussions on Africa's development landscape. The meetings also saw the election of a new president for a five-year term, beginning 1 September. On Thursday, governors of the Group's 81 shareholders elected former finance minister Mauritanian Sidi Ould Tah as the new president of the continent's premier development institution. The meetings were held in Abidjan, Côte d'Ivoire from 26-30 May under the theme: Making Africa's Capital Work Better for Africa's Development —a call for leaders to ditch aid and look inwards to Africa's rich capital to solve its development and economic challenges. Secretary General of the Bank Vincent Nmehielle described the meetings as a 'resounding success'. He thanked Nialé Kaba, Minister of Economy, Planning and Development, outgoing Chairperson of the Boards of Governors, for her 'sterling work, dedication and guidance of her duties over the past year.' He also thanked the 81 governors—finance ministers, economy ministers or central bank governors representing each of the African Development Bank's shareholder countries. Thirteen outgoing executive directors who have finished their term of office were recognized. Together, they represent a 75 percent change in the board composition for the next year. Outgoing President Dr. Akinwumi Adesina expressed his best wishes to the president-elect. 'I am delighted for my brother and friend on his election as president of the African Development Bank Group. Hearty congratulations! I wish you great success in the years ahead,' Adesina said. Participants also heard video congratulatory messages to Adesina from world leaders, including World Bank head Ajay Banga and Ngozi Okonjo-Iweala, director general of the World Trade Organization. The Board of Governors also sent a congratulatory message conveyed through the Bank governor for Zambia, Situmbeko Musokotwan, Minister of Finance and National Planning. 'We thank you for the remarkable results,' he said. The meetings also saw new milestones for the Bank. On Thursday, the Bank signed an agreement with the Finance ministry of Nigeria to extend the Nigeria Trust Fund ( another 15 years. Nigeria provided an additional $500 million to the Nigeria Trust Fund. 'An impressive contribution. Thank you, Nigeria,' Adesina said. The Nigeria Trust Fund, the third arm of the Bank Group, is a self-sustaining revolving fund set up to assist the development efforts of the Bank's low-income regional member countries whose economic and social conditions and prospects require concessional financing. Its resources are allocated to projects, not to countries. 'I am glad this agreement was signed a day before the end of the meetings,' Adesina said. In an emotional farewell, Adesina sang a few of his favorite songs—Johnny Nash's 'I can see clearly now,' and Bob Geldof's 'We are the World.' 'This is my last Annual Meetings as president of the African Development Bank Group, after completing two five-year terms,' Adesina said. 'It has been an extraordinary ten years working together... Thank you for the opportunity, trust and resources you gave me to serve as President of the African Development Bank Group. It has been the greatest honour of my life to serve as President of the African Development Bank Group and to serve Africa.' In a short ceremony Kaba, handed the African Development Bank's flag to Congolese Economy minister Ludovic Ngatse and announced that the 2026 Annual Meetings of the Bank Group will take place in Congo Brazzaville from 25-29 May 2026. Speaking on behalf of Ivorian Prime Minister Robert Beugre, Kaba also thanked all participants 'for contributing to the strategic reflection and solidarity with a view to steering our continent to a better future. and Cote d'Ivoire, the host country.' In addition to the official programme, 60 side events as well as cultural events and a spouse's programme were part of this year's colourful meetings. To review sessions you missed or for any information on the Annual Meetings, click here ( Distributed by APO Group on behalf of African Development Bank Group (AfDB). Contact: Amba Mpoke-Bigg Communication and External Relations Department email: media@ About the African Development Bank Group: The African Development Bank Group is Africa's premier development finance institution. It comprises three distinct entities: the African Development Bank (AfDB), the African Development Fund (ADF) and the Nigeria Trust Fund (NTF). On the ground in 41 African countries with an external office in Japan, the Bank contributes to the economic development and the social progress of its 54 regional member states. For more information:
Zawya
28-05-2025
- Business
- Zawya
2025 Annual Meetings: Africa's Vast Human and Natural Capital Key to Achieving African Union's Agenda 2063, experts affirm
Africa, the world's youngest continent with immeasurable natural resources, has all it needs to achieve the African Union's Agenda 2063, provided the right public policies are implemented, according to government officials and development experts. The experts expressed this shared conviction on Monday during the 2025 Annual Meetings of the African Development Bank Group, taking place in Abidjan, Côte d'Ivoire, under the theme 'Making Africa's Capital Work Better for Africa's Development.' Speaking at a knowledge event titled 'Second Ten-Year Implementation Plan for Agenda 2063: An Opportunity to Develop and Finance Africa's Capital,' Koffi N'Guessan, Ivorian Minister of Vocational Training and Apprenticeships, reaffirmed that Agenda 2063 -- adopted in January 2015 by the African Union – remains the strategic framework for the continent's economic and social transformation. N'Guessan noted that, despite a challenging global environment, the last decade has seen notable progress in Africa, particularly in economic and political integration, gender equality, and access to employment opportunities. However, he acknowledged that previous efforts have often fallen short of addressing the continent's structural transformation needs, including job creation for youth and poverty reduction. 'The second Agenda 2063 implementation plan, adopted in February 2024 by the African Union, offers a crucial opportunity to tackle these challenges and accelerate development outcomes,' he said. According to the Ivorian Minister, Africa is poised to become a major global power, alongside China and India, due to its demographic potential. However, he stressed that African countries should prioritize vocational and technical training to fully harness this demographic dividend. He highlighted a worrying trend: approximately 22.5 percent of young people aged 15 to 24 are unemployed with no education or training. Additionally, 250 million children and young people in low-income countries are not in school, underlining the disconnect between education systems and labor market needs. 'Youth can become a liability if robust training policies are not implemented - from nursery school through to university,' he warned. Taking natural capital into account when calculating GDP Hervé Lohouès, Division Manager in the Country Economics Department at the African Development Bank, emphasized the importance of natural wealth in calculating the GDP of African countries. 'The GDP of a country like the Central African Republic would increase by 300 percent if its natural resources were taken into account in the calculation of its GDP,' he asserted. He added: 'It is essential to go beyond natural enhancement and ensure that all African countries adopt a compulsory development plan. We also need to ensure that governments provide incentives for transformation while considering accountability that can directly help the transition from natural to social infrastructure.' Jide Okeke, Regional Program Coordinator for Africa at the United Nations Development Programme, and Dagmawit Moges Bekele, former Eritrean Minister of Transport and Director of the Peace Fund at the African Union Commission, both stressed the need to leverage human, financial, natural and digital resources to drive inclusive and sustainable development -- key to achieving the objectives outlined in the second decade of Agenda 2063. Distributed by APO Group on behalf of African Development Bank Group (AfDB).
