Latest news with #DebtCrisis
The Herald
15-07-2025
- Business
- The Herald
Bessent no-show, Brics tensions set to cast shadow over Durban G20 meeting
'Policy uncertainty is the biggest theme now,' South African Reserve Bank deputy governor Fundi Tshazibana told Reuters. The G20 has its origins in past crisis firefighting and took off as countries around the world saw a need to co-ordinate policies to emerge from the global financial crisis of the late 2000s. 'The G20 was built around a presumption that all the world's major economies shared a common interest in a stable, relatively open global economy,' said Brad Setser of the Council on Foreign Relations. 'But Trump doesn't care about stability and wants a more closed global economy.' The Durban gathering of finance chiefs on Thursday and Friday also unfolds against a backdrop of mounting economic pressures, particularly for African economies. Sub-Saharan Africa's external debt has ballooned to $800bn (R14.24-trillion), or 45% of GDP, according to Goldman Sachs, while traditional funding sources are drying up. Chinese lending has slowed to a trickle after years of expansion, leaving an $80bn (R1.42-trillion) financing gap. 'The views they've expressed are if you negotiate them down before taking the loan, they will go with that,' said Trevor Manuel, former finance minister of South Africa who is leading the Africa Expert Panel of the G20. 'But once the loan is made, they expect a return and that is embedded in their legislation. So that is one issue that needs a lot of attention.' China's Belt and Road Initiative has brought significant resources to the African continent, 'but there are also the offsets', said Manuel. 'I think that part of the push in future is greater transparency, which means some of the barter arrangements and so on need to be dealt with differently.'
Business Recorder
28-06-2025
- Business
- Business Recorder
Developing states' debt service tops $921bn: UN
UNITED NATIONS: Debt service payments by developing countries soared by $74 billion in 2024, ie, from $847 billion to $921, according to a new UN report, which points out that two-thirds of the low income nations are either in debt distress or at a high risk of it. The report, 'Confronting the Debt Crisis: 11 Actions to Unlock Sustainable Financing,' was launched on Friday by UN Deputy Secretary-General Amina Mohammed. Mohammed was joined by experts Mahmoud Mohieldin and Paolo Gentiloni, along with Rebeca Grynspan, Head of the UN Conference on Trade and Development (UNCTAD). Debt and climate — I 'Borrowing is critical for development,' Ms Mohammed said, but today, 'borrowing is not working for many developing countries, over two-thirds of our low income countries are either in debt distress or at a high risk of it.' The report showed a 'silent crisis' of surging debt service payments in low-income countries and charted the path out of the debt crisis threatening global development. Ms Mohammed regretted that a decade after the adoption of the Sustainable Development Goals (SDGs), development was facing serious headwinds. On her part, Grynspan warned that the crisis was accelerating. The report showed more than 3.4 billion people now live in countries that spend more on interest payments than on health or education, 100 million more than previous year. 'The nature of this crisis is mostly connected to the increase of debt servicing costs,' Gentiloni explained. 'Practically, the debt services costs doubled in the last 10 years.' Prepared by the UN Secretary-General's Expert Group on Debt, the report reinforced the commitments put forward in the 'Compromiso de Sevilla', which is the outcome document of the Fourth International Conference on Financing for Development – taking place in Sevilla, Spain, next week. The report outlines 11 actions that are both technically feasible and politically viable. Mohieldin explained that the recommendations fall under two key goals: providing meaningful debt relief and preventing future crises. It identified three levels of action including repurpose and replenish funds to inject liquidity into the system, with targeted support for low-income countries at the multilateral level. The other is establishing a platform for borrowers and creditors to engage directly at the international level: At the national level, the report recommended strengthening institutional capacity, improving policy coordination, managing interest rates and bolstering risk management. 'These are 11 proposals that are doable and that only need the political will of all the actors to be able to make them real,' Grynspan stressed.
