African voices are shaping G20 discussions around international financial

“Reforming the global financial architecture” has become a central theme in multilateral discussions.

Today’s global financial architecture was designed in 1944 at the Bretton Woods conference, which looked to rebuild postwar Europe. But there was no African representation there. Today, the global financial system struggles to meet the needs of a continent that is home to 1.5 billion people—nearly a fifth of the world’s population. African countries still face high borrowing costs, debt distress, and limited fiscal space.

But now, policy forums are looking to reform the financial system to ensure that it works for African countries. One such forum is the Group of Twenty (G20) International Financial Architecture Working Group (IFAWG), a technical working group of the G20’s Finance Track, which focuses on monetary, fiscal, and economic issues. I am participating in the group today in my capacity as an advisor at the African Development Bank. Here’s my analysis on the policy discussions we’re having this year in the IFAWG and why they matter for Africa.

Inside IFAWG

IFAWG was established following the 2008 global financial crisis and is mandated to promote stability in the international financial system. Initially focused on issues including capital flow volatility and crisis prevention, its role has since expanded dramatically. Today, the working group is the G20’s central venue for discussions on sovereign debt and debt sustainability, cost of capital, reforms of multilateral development banks (MDBs), and strengthening the global financial safety net.

The group submits its deliverables to the G20 Finance Ministers and Central Bank Governors Meetings, and such deliverables ultimately form part of the negotiated G20 communiqué. That’s why African representation in these working groups is so important. These groups are fora where policies are shaped before receiving endorsement at the ministerial level.

This shaping—of both policy and conversation—has increasingly been conducted by African voices, particularly during South Africa’s G20 presidency this year. South Africa chose “Solidarity, Equality, Sustainability” as the theme of its presidency, and it has set priorities intended to align with the development needs of the African continent and the Global South. Within IFAWG, such priorities include strengthening MDBs, mobilizing development finance, addressing sovereign debt sustainability and liquidity challenges, reforming the global financial safety net, and enhancing capital flows to emerging markets and developing economies.

Strengthening MDBs and unlocking capital

IFAWG is focusing on strengthening MDBs, as implementing reforms will be particularly important for unlocking much-needed capital at scale. But the MDB-reform agenda has already been underway for some…