South Africa’s G20 presidency complicated by US hostility

During his speech at the G20 finance ministers’ meeting at the end of February, South Africa President Cyril Ramaphosa suggested that closing the large inequality gap between developing and developed countries would create a more prosperous world. “As the G20 we need deliberate and coordinated efforts to focus on inclusive growth based on responsive trade and investment to grow the incomes of the poor nations and poorest in society and this we should do in our own selfish interests,” Ramaphosa said.

Tackling inequality is thus a major pillar of South Africa’s rotating presidency of the G20 – an intergovernmental forum of the world’s richest countries, plus the European Union (EU) and African Union (AU). This year is the first time the summit will be held on African soil, offering an opportunity for the continent to stress its unique priorities.

Pretoria is elevating four key themes under its presidency: strengthening disaster resilience and response, especially in poor countries that cannot afford the costs of recovery; debt sustainability for low-income countries; mobilising finance for the just energy transition; and harnessing critical minerals for inclusive growth. But analysts are questioning how South Africa can drive its agenda forward without the participation of high-level US representatives, who have pledged not to attend certain meetings.

On 5 February US secretary of state Marco Rubio announced on X (formerly Twitter) that he would not attend a foreign ministers’ summit. He dismissed South Africa’s G20 goals as anti-American.

“I will NOT attend the G20 summit in Johannesburg. South Africa is doing very bad things. Expropriating private property. Using G20 to promote ‘solidarity, equality, & sustainability’. In other words: DEI and climate change. My job is to advance America’s national interests, not waste taxpayer money or coddle anti-Americanism,” he tweeted.

Since then, diplomatic relations have gone from bad to worse, with Rubio declaring South African ambassador to the US Ebrahim Rasool (pictured) “persona non grata” in March after accusing him of being “a race-baiting politician who hates America”.

Menzi Ndhlovu, senior analyst at consultants Signal Risk, tells African Business that the G20 is a limited forum without American support. “If you look at global financial structures, America is still the largest consumer, the largest aid donor, and the most influential actor in bodies through which G20 agendas unfold, such as the IMF, World Bank and WTO. If you have America outside of any G20 agreement, it’s unlikely that it’s going to gather momentum.”

Elizabeth Sidiropoulos, chief executive of the South African Institute of International Affairs (SAIIA), believes that South Africa must focus on what the forum can achieve without the US. She says there are areas where progress can be made, and areas where the US absence will be much more keenly felt.

“Certain reforms to the IMF and World Bank, where the US has veto power, and also the World Trade Organization trade dispute settlement system, are areas where we can’t expect progress at the moment,” she says.

Can the G20 work around the US?

But areas where South Africa can make feasible progress are climate change and reforms to global governance institutions, Sidiropoulos adds.

“South Africa can work on maintaining the consensus on climate change even if the world’s second largest emitter isn’t at the table.

“We can push changes in some ways in which the IMF operates – for example we can propose to reduce the surcharges that the IMF charges to borrower countries which can make a massive difference to these countries.”

Mohamed Cassimjee, a former South African diplomat who now works as a geopolitical consultant, tells African Business that issues put forward by South Africa may not have full consensus by the end of its presidency period, but says that introducing them into the conversation is nevertheless important.

“South Africa’s first victory is to put Africa and its issues on the agenda as well as issues related to the Global South. In terms of actual deliverables, those tend to come slightly later,” he says.

Having access to finance is key for developing nations – for example, for South Africa, as it looks to transition away from heavy coal reliance to cleaner energy production, and cope with extreme weather events.

But the ambitious finance demanded by Ramaphosa for tackling inequality might be harder to come by in a changing world order fuelled by a new more sceptical White House administration. In March the US decided to cut loans for the multi-billion dollar Just Energy Transition Partnership (JETP), an international agreement that supports South Africa’s shift from coal to cleaner energy. Other supporting nations could cover the shortfall, but Ndhlovu believes that richer nations might become more reluctant to provide funding in the absence of the US.

“Europe is not in the position to effectively reduce the funding gap. Frankly they are panicking at the moment because they need to mobilise money for defence. China’s economy is not doing as well as it was a decade ago and they have become less generous to Africa. There are other players, but I don’t think any will be able to fill the vacuum left by the US at the moment,” he says.

Nevertheless, Sidiropoulos thinks that there are areas where Africa can improve its financial position without the necessity of G20-wide reform. “Africa needs also to work on the fundamentals to improve investor confidence such as improved governance, predictability, and transparency.”

African countries have for long complained about the perceived bias of established credit ratings agencies to Africa, which they say make credit more expensive for them.

According to a 2023 report by the United Nations Development Programme, African nations could save as much as $74.5bn if credit ratings were determined using more objective criteria.

At present the AU is planning to launch its own credit rating agency, the African Credit Rating Agency (AfCRA), in the second half of 2025.

“Hedge funds and other financiers still have to believe in those credit ratings, which is not a foregone conclusion – but what it could do is force the established agencies to consider the AU methodology, and this might create opportunities to reform the system.”

The return of global competition

Elsewhere, there has been much talk from African leaders about working together through the G20 and other forums to leverage the continent’s critical mineral wealth.

But Christopher Vandome, senior research fellow at Chatham House, says that here too, finding consensus will be a challenge. “In reality, I think that we’re going to start seeing competition between countries again. They will go to all the summits and talk the talk on regional industrialisation, but when it comes down to it, if they’ve got a bilateral approach for specific things in their country, they’re going to go for it.”

Sidiropoulos believes that there is a real risk of African fragmentation in a world of increasing geopolitical tensions. “When you are in uncertain times, your survival instincts kick in as a country, and there is a very real risk of fragmentation, of being picked off one at a time. We have already seen rumblings in the news about the US and DRC announcing their openness to a critical minerals deal.”

She says that Africa needs strong leadership, and to accelerate economic initiatives through the G20. Given that, the forum promises to be both an opportunity and a challenge for Ramaphosa on the global stage.

“At this critical time you need visionary leaders who can mould together the continent. Industrialisation and building up value chains won’t happen overnight. We need to accelerate this economically through the African Continental Free Trade Area. The pieces are there but we need the political will,” Sidiropoulos concludes.