Latest news with #TrevorManuel
Eyewitness News
17-07-2025
- Business
- Eyewitness News
Africa Expert Panel chair Manuel says debt crisis in emerging economies cannot be deferred any longer
JOHANNESBURG - Chairperson of the Africa Expert Panel, Trevor Manuel, says the debt crisis in emerging economies cannot be deferred any longer as the G20 finance track meets in KwaZulu-Natal (KZN). High debt servicing costs are crowding out important social spending on health and education, sparking further calls for significant debt relief to unlock the necessary funding to meet some development goals. Manuel is heading the expert panel established earlier this year to address the unprecedented debt crisis affecting many African countries. Manuel joined Finance Minister Enoch Godongwana and Reserve Bank Governor Lesetja Kganyago in Zimbali on Tuesday to discuss policy. This year, African countries will pay close to $89 billion in external debt service alone, with 20 low-income countries at risk of debt distress. External debt has climbed to more than $650 billion, and debt servicing costs reached nearly $90 billion in 2024. The Africa expert panel will add to the G20's policy directives on debt sustainability. Manuel said part of the discussion is the cost of capital. 'When countries borrow and interest rates are very high, and they increase in time, then there's a bigger problem going forward.' He said Africa must better develop domestic capital markets. 'If countries could borrow in their own currencies, then they don't carry the exchange rate burden because when you have a fluctuation, many countries borrow in dollars or euros, and when their own currencies depreciate against those hard currencies, then the interest rate burden becomes unsustainable.' At the start of South Africa's G20 presidency, the country proposed a cost of capital commission to level the playing field.
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.'
IOL News
04-06-2025
- Business
- IOL News
High-cost loans, Trump turmoil hurting Africa, says G20 panel chief
Seasoned politician and anti-apartheid activist Trevor Manuel chairs the panel of experts working on proposals to address issues affecting Africa, including high debt, to be presented at a summit of the Group of 20 leading economies in November. Image: AFP Critically needed economic growth in Africa is being held back by high borrowing costs imposed by international lenders, with unpredictable US policy changes adding to the strain, the head of the G20 panel on the continent said. Seasoned politician and anti-apartheid activist Trevor Manuel chairs the panel of experts working on proposals to address issues affecting Africa, including high debt, to be presented at a summit of the Group of 20 leading economies in November. African nations are not necessarily more indebted than major economies but they face higher debt servicing costs, Manuel told AFP in an interview. The "unbelievably expensive and prohibitive" cost of capital for African nations has hobbled their development, said Manuel, who served as finance minister in post-apartheid South Africa for more than a decade. "We know that the risk premiums in general on Africa are much higher than they need to be, and that impacts them on the debt service costs," he added. More than half of Africa's 1.3 billion people live in countries with debt interest payments higher than social spending on health, education and infrastructure, according to the South African government. South Africa is the only African nation in the G20 and has made debt sustainability for developing countries one of the priorities of its presidency of the group of 19 countries, the African Union and European Union. African countries will pay close to $89 billion (R1.6 trillion) in external debt service alone this year, with 20 low-income countries at risk of debt distress, it says. Manuel said the panel will seek to persuade the entire G20 to engage with multilateral development banks, in particular the World Bank and International Monetary Fund, to address the issue of borrowing costs. 'Unbelievably difficult' Abrupt changes in global order since US President Donald Trump took office in January, such as sweeping aid cuts and trade tariffs, will have long-lasting ramifications for the continent, Manuel said. Trump's "capricious" announcement in April of major trade tariffs effectively did away with the African Growth and Opportunity Act, a major US-African trade deal that had helped to build some African economies, he said. He cited as examples the tiny kingdom of Lesotho, which faces 50% tariffs on exports to the US, including jeans and golf shirts, and Madagascar, which sends vanilla pods and is threatened with 47% tariffs. "It becomes unbelievably difficult for small countries that try and develop export markets, for their products to be struck by these sudden announcements," Manuel said. "There's no time for adjustment." Adding to the pressure is the termination of Usaid programmes and a push for Nato countries to increase defence spending, which restricts what they have available for overseas development assistance. "The impact on the African continent is going to be very severe," said Manuel. "We can't abstract Africa from the rest of the globe." "The realm of policymaking requires a greater degree of predictability and certainty than what we see at the moment," he said. "The fact that there are these occasional outbursts that aren't informed by reality as I see it... makes it even more complex." Intra-Africa Manuel said his panel's work on better understanding the African economy and developing solutions was likely to continue beyond this year's G20, for example, via the UN Economic Commission for Africa and the African Union. This included looking at "intra-African dynamics" such as the role of the African Continental Free Trade Area (AfCFTA) launched in 2019. Conflicts also cost the continent, he said, citing the war in Sudan and unrest that has held back a major gas project in impoverished northern Mozambique. "When countries spend more on war than what they do on the upliftment of people, then we face profound consequences," Manuel said. He said a strong United Nations and African Union were important in "persuading countries to do the right things" in the long term, beyond the sometimes disruptive short electoral cycles that usher in new leadership and policy changes. "If you don't have those kinds of objectives, which frequently will not be completed within a particular electoral cycle, I think we run ourselves into the ground." AFP
NDTV
04-06-2025
- Business
- NDTV
High-Cost Loans, Trump Turmoil Hurting Africa, Says G20 Panel Chief
Critically needed economic growth in Africa is being held back by high borrowing costs imposed by international lenders, with unpredictable US policy changes adding to the strain, the head of the G20 panel on the continent said. Seasoned politician and anti-apartheid activist Trevor Manuel chairs the panel of experts working on proposals to address issues affecting Africa, including high debt, to be presented at a summit of the Group of 20 leading economies in November. African nations are not necessarily more indebted than major economies but they face higher debt servicing costs, Manuel told AFP in an interview. The "unbelievably expensive and prohibitive" cost of capital for African nations has hobbled their development, said Manuel, who served as finance minister in post-apartheid South Africa for more than a decade. "We know that the risk premiums in general on Africa are much higher than they need to be, and that impacts them on the debt service costs," he added. More than half of Africa's 1.3 billion people live in countries with debt interest payments higher than social spending on health, education and infrastructure, according to the South African government. South Africa is the only African nation in the G20 and has made debt sustainability for developing countries one of the priorities of its presidency of the group of 19 countries, the African Union and European Union. African countries will pay close to $89 billion in external debt service alone this year, with 20 low-income countries at risk of debt distress, it says. Manuel said the panel will seek to persuade the entire G20 to engage with multilateral development banks, in particular the World Bank and International Monetary Fund, to address the issue of borrowing costs. 'Unbelievably difficult' Abrupt changes in global order since US President Donald Trump took office in January, such as sweeping aid cuts and trade tariffs, will have long-lasting ramifications for the continent, Manuel said. Trump's "capricious" announcement in April of major trade tariffs effectively did away with the African Growth and Opportunity Act, a major US-African trade deal that had helped to build some African economies, he said. He cited as examples the tiny kingdom of Lesotho, which faces 50 percent tariffs on exports to the United States, including jeans and golf shirts, and Madagascar, which sends vanilla pods and is threatened with 47 percent tariffs. "It becomes unbelievably difficult for small countries that try and develop export markets, for their products to be struck by these sudden announcements," Manuel said. "There's no time for adjustment." Adding to the pressure is the termination of USAID programmes and a push for NATO countries to increase defence spending, which restricts what they have available for overseas development assistance. "The impact on the African continent is going to be very severe," said Manuel. "We can't abstract Africa from the rest of the globe." "The realm of policymaking requires a greater degree of predictability and certainty than what we see at the moment," he said. "The fact that there are these occasional outbursts that aren't informed by reality as I see it... makes it even more complex." Intra-Africa Manuel said his panel's work on better understanding the African economy and developing solutions was likely to continue beyond this year's G20, for example, via the UN Economic Commission for Africa and the African Union. This included looking at "intra-African dynamics" such as the role of the African Continental Free Trade Area (AfCFTA) launched in 2019. Conflicts also cost the continent, he said, citing the war in Sudan and unrest that has held back a major gas project in impoverished northern Mozambique. "When countries spend more on war than what they do on the upliftment of people, then we face profound consequences," Manuel said. He said a strong United Nations and African Union were important in "persuading countries to do the right things" in the long term, beyond the sometimes disruptive short electoral cycles that usher in new leadership and policy changes. "If you don't have those kinds of objectives, which frequently will not be completed within a particular electoral cycle, I think we run ourselves into the ground."
France 24
04-06-2025
- Business
- France 24
High-cost loans, Trump turmoil hurting Africa, says G20 panel chief
Seasoned politician and anti-apartheid activist Trevor Manuel chairs the panel of experts working on proposals to address issues affecting Africa, including high debt, to be presented at a summit of the Group of 20 leading economies in November. African nations are not necessarily more indebted than major economies but they face higher debt servicing costs, Manuel told AFP in an interview. The "unbelievably expensive and prohibitive" cost of capital for African nations has hobbled their development, said Manuel, who served as finance minister in post-apartheid South Africa for more than a decade. "We know that the risk premiums in general on Africa are much higher than they need to be, and that impacts them on the debt service costs," he added. More than half of Africa's 1.3 billion people live in countries with debt interest payments higher than social spending on health, education and infrastructure, according to the South African government. South Africa is the only African nation in the G20 and has made debt sustainability for developing countries one of the priorities of its presidency of the group of 19 countries, the African Union and European Union. African countries will pay close to $89 billion in external debt service alone this year, with 20 low-income countries at risk of debt distress, it says. Manuel said the panel will seek to persuade the entire G20 to engage with multilateral development banks, in particular the World Bank and International Monetary Fund, to address the issue of borrowing costs. 'Unbelievably difficult' Abrupt changes in global order since US President Donald Trump took office in January, such as sweeping aid cuts and trade tariffs, will have long-lasting ramifications for the continent, Manuel said. Trump's "capricious" announcement in April of major trade tariffs effectively did away with the African Growth and Opportunity Act, a major US-African trade deal that had helped to build some African economies, he said. He cited as examples the tiny kingdom of Lesotho, which faces 50 percent tariffs on exports to the United States, including jeans and golf shirts, and Madagascar, which sends vanilla pods and is threatened with 47 percent tariffs. "It becomes unbelievably difficult for small countries that try and develop export markets, for their products to be struck by these sudden announcements," Manuel said. "There's no time for adjustment." Adding to the pressure is the termination of USAID programmes and a push for NATO countries to increase defence spending, which restricts what they have available for overseas development assistance. "The impact on the African continent is going to be very severe," said Manuel. "We can't abstract Africa from the rest of the globe." "The realm of policymaking requires a greater degree of predictability and certainty than what we see at the moment," he said. "The fact that there are these occasional outbursts that aren't informed by reality as I see it... makes it even more complex." Intra-Africa Manuel said his panel's work on better understanding the African economy and developing solutions was likely to continue beyond this year's G20, for example, via the UN Economic Commission for Africa and the African Union. This included looking at "intra-African dynamics" such as the role of the African Continental Free Trade Area (AfCFTA) launched in 2019. Conflicts also cost the continent, he said, citing the war in Sudan and unrest that has held back a major gas project in impoverished northern Mozambique. "When countries spend more on war than what they do on the upliftment of people, then we face profound consequences," Manuel said. He said a strong United Nations and African Union were important in "persuading countries to do the right things" in the long term, beyond the sometimes disruptive short electoral cycles that usher in new leadership and policy changes. "If you don't have those kinds of objectives, which frequently will not be completed within a particular electoral cycle, I think we run ourselves into the ground." © 2025 AFP
