The Scoop
South Africa will prioritize improving access to infrastructure finance for emerging economies during its year-long presidency of the G20, the head of a task force overseeing the plans told Semafor.
Standard Bank CEO Sim Tshabalala said his team will recommend plans to better “manage transparency” around the decisions made by rating agencies to assess creditworthiness “so that there’s an alignment between the fundamentals and the actual rating issuer.” African policymakers have long complained that perceived risks increase the cost of borrowing needed to develop infrastructure.
Tshabalala, who chairs the task force on infrastructure and finance for the B20, the forum representing businesses from G20 nations, hopes this and other proposals will make it “easier to provide funding for African infrastructure.”
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In a wide-ranging interview, the head of Africa’s biggest bank by assets told Semafor the task force sought to increase the availability and efficiency of public and private investments, support the expansion of infrastructure projects, and ensure that funding for infrastructure is sustainable and resilient.
The aim, said Tshabalala, is to craft a set of recommendations that improve the focus on strategic sectors like energy and technology while creating conditions for better public-private collaboration.
Improving access to infrastructure finance in Africa and other emerging markets requires a “clearly understandable, more modern set of rules and regulations that pertain to private, public partnerships,” said the South African banker.
He also said the task force would also consider new foreign exchange products to help emerging market currencies cope with global market vagaries. Boosting emerging markets trade required greater access to guarantee and foreign exchange products, Tshabalala added.
Another proposal under consideration is the creation of a “cost of capital commission” — a body to address the cost of capital in Africa, which has historically contributed to problems around debt sustainability.
Step Back
South Africa’s President Cyril Ramaphosa extolled multilateralism as he opened the first-ever G20 to be held in Africa on Tuesday. But several finance ministers from the world’s biggest economies skipped the meeting, underscoring geopolitical tensions of which South Africa is at the center.
South Africa’s hosting of the G20 has been overshadowed by increasing friction between Pretoria and Washington, with US President Doland Trump publicly criticizing the country on matters including its new land ownership laws.
US Treasury Secretary Scott Bessent missed a two-day meeting of G20 finance ministers and central bank chiefs in Cape Town on Wednesday. And US Secretary of State Marco Rubio snubbed a foreign minister’s gathering in Johannesburg last week. Rubio announced his decision not to attend the gathering in a post on X in early February in which he accused Pretoria of “doing very bad things.”
The absence of key economies — including ministers from the US, Brazil, China, India, Japan, and Mexico — points to the depth of the fractures in the multilateral forum.
Tshabalala said the B20’s program continued despite these geopolitical problems, emphasizing that it enjoyed the support and participation of key US-based institutions and players.
Notable
- South Africa’s G20 presidency is an opportunity to amplify the African Union’s agenda by creating institutional priorities and policies, Ronald Lamola, the country’s international relations minister, wrote in an article for the US-based Brookings Institution think tank.