Washington: The United States has officially taken over the presidency of the Group of Twenty (G20), inheriting a complex global debt landscape that has reached unprecedented levels. South Africa, which concluded its year-long term as G20 chair, focused on advancing debt sustainability measures, particularly for developing nations in Africa. With the baton now passed to Washington, the global community is closely observing whether the G20 under U.S. leadership can convert promises of debt relief into actionable solutions. The stakes are high: more than 20 developing countries are already in or at high risk of debt distress, while global debt surpasses $100 trillion.
During its tenure, South Africa sought to position the G20 as a forum capable of responding to the mounting financial pressures faced by emerging economies. It prioritized Africa in its agenda, highlighting the vulnerabilities of nations heavily dependent on external financing. Initiatives such as the G20’s Common Framework for debt treatment, initially launched in 2020, were emphasized as mechanisms for orderly debt restructuring. However, progress has been slow, with only a handful of countries including Chad, Zambia, Ghana, and Ethiopia benefiting from restructuring under the framework so far. Critics argue that these measures, while symbolically important, have been insufficient to address the scale and urgency of the crisis.
The impact of debt stress is particularly evident across the African continent. Senegal’s undisclosed borrowings recently prompted the International Monetary Fund to suspend a $1.8 billion assistance program, triggering a downgrade in its credit ratings. In Gabon, the government turned to innovative liability-management tools, including bond swaps worth roughly $1 billion, to ease repayment pressures. Meanwhile, Malawi’s debt-to-GDP ratio has approached 90 percent, and Mozambique is seeking professional advisers to explore restructuring options. These cases illustrate how rapidly debt vulnerabilities can escalate and highlight the urgent need for coordinated solutions at the G20 level.
The U.S. presidency of the G20 presents both opportunities and uncertainties for the debt agenda. Washington has pledged to maintain a focus on financial stability, economic growth, and job creation, signaling potential continuity with South Africa’s debt relief priorities. Initiatives such as the recently launched G20 Africa Engagement Framework aim to combine financing, growth, and anti-poverty interventions under a unified agenda. Yet, structural challenges remain. Reforms such as reducing borrowing costs for the poorest nations, recalibrating global banking rules, and improving access to concessional financing require sustained commitment, and the G20’s consensus-driven approach has historically slowed decisive action.
For emerging economies like India, the shift from a developing-country chair to a developed-country chair may influence the group’s priorities. India has a vested interest in ensuring that debt sustainability mechanisms remain robust, as unresolved global debt issues can ripple into trade, investment, and regional stability. The coming year will test whether the G20 can bridge the gap between the Global North and South, translating high-level pledges into tangible relief for the world’s most financially vulnerable countries.
As the United States assumes leadership, the central question remains whether the G20 can evolve from a discussion forum into an effective mechanism for debt resolution. Observers emphasize that the credibility of the G20 hinges not on declarations, but on results. For countries across Africa, Asia, and other emerging markets, the success or failure of this term could define financial stability for years to come. The world now watches closely, as the G20 under U.S. stewardship confronts one of the most pressing economic challenges of the decade.