At the Business20 (B20) conference on Tuesday, a host of business leaders from across G20 nations gathered to address pressing global economic and trade challenges.
The B20 platform plays an instrumental role in shaping global economic policies and promoting international collaboration.
One of the key discussions from the conference, “The G20 in 2025, international organisations, and the impact on business” included Department of Trade, Industry and Competition Minister Parks Tau, Assistant Secretary-General and Director of UNDP's Regional Bureau for Africa Ahunna Eziakonwa, Secretary General, International Chamber of Commerce, John Denton, and Vice-President to the ILO, International Organisation of Employers, Renate Hornung-Draus.
Minister Tau touched on how the G20 is an African G20 “not only because it is hosted on the African continent, but because in fact, it is an opportunity for us to address key developmental challenges in the global south, and Africa in particular”.
“It enables us to leverage off the African Continental Free Trade Agreement, as a platform from which we seek to integrate our collective markets,” Tau said.
Tau touched on how global trade is undergoing its own challenges which include the multilateral trading system, and the challenges at the world trade organization - “both in terms of multilateral decision making and governance, but also the dysfunctionality of the dispute resolution system”.
He also addressed the increased protectionism, a political ideology focused on restricting imports from other countries through methods including tariffs on imported goods, import quotes and a variety of government regulations.
“Particularly in countries in the global north we are witnessing this level of protectionism taking place. For us the G20 must resolve those issues, and must engage with the intention of resolving the global trade issues, and the global trade environment,” Tau said.
Touching on protectionism, Eziakonwa said that it means that the opportunities for global value chains for the continent are diminishing, and this will force businesses to turn to regional markets.
Eziakonwa said that when it comes to cost of capital, “we cannot do infrastructure without fair capital access to countries that are laying these infrastructure”.
Hornung-Draus added that there are indirect forms of protectionism outside of tariffs.
“What we see now happening, unfortunately, is a push overregulating and creating legal risks for companies which want to invest or trade internationally, by imposing non-financial reporting across the entire value change…(This) obliges companies to diminish their risk, and how do they diminish their risk? Of course, by pulling out of the market…”
The second matter the minister addressed was the increased debt that countries face, and inequity in the debt environment - namely the cost of capital.
“Cause in reality, whilst we are talking about canvassing the global south, having of course lower credit ratings, and the economies are not stronger therefore, of course we would pay higher interest rates than our counterparts but the reality is that it exacerbates the level of inequality and inequity in the world, and I think that is a particular issue that we should address,” Tau said
“We’re putting firmly on the table at the G20, is the idea of establishing a Cost of Capital Commission, and this commission is to work towards addressing the cost of capital, and ensuring that we are able to create equity in relation to the access to capital, and the cost of capital.
Back in December, International Relations and Cooperation Minister Ronald Lamola already mentioned this commission stating that it will investigate issues that impair the ability of low- and middle-income countries to access affordable capital, and is set to be launched under South Africa’s G20 Presidency.
Eziakonwa added that if we are talking about shared prosperity, and inclusive growth in the continent, “it is imperative that there is regional cooperation and collaboration”
“The unfair (credit) rating on Africa is costing this continent billions of dollars. We did a study on the cost of borrowing, which looked at 16 countries whose credit rating accounted for up to 75 billion dollars of losses as result of non-objective ratings… The cost of borrowing has to be addressed.”