South Africa, the new G20 chair, is urging a reassessment of the existing debt restructuring framework for poor nations, the Common Framework (CF) for Debt Treatments beyond the Debt Service Suspension Initiative (DSSI), launched by the G20 in 2020, Bloomberg reported.
"We need a better review of the CF. It's insufficient to deal with the kind of challenges we're dealing with in terms of debt service costs," South African Finance Minister Enoch Godongwana told the agency.
In its November's report on the Africa's development, the UN also stressed the need to review Africa's historical reliance on debt instruments and the current framework.
The continent's external debt has risen to over $650 billion, with servicing costs reaching $90 billion in 2024, limiting investment in the poorest regions, the UN Special Advisor on Africa, Cristina Duarte, said in the report.
High debt-servicing costs are hindering crucial development spending in many African countries; over 40% of African countries allocate more funds to debt service than to health, Duarte pointed out.
South Africa's priority as the next G20 chair, among others, will be extending debt relief for developing countries, South African President Ramaphosa stated earlier in December.