G20 underlines need to enhance developing nations’ representation in decision making of Multilateral Development Banks
“In this context, we welcome the creation of a 25th seat on the IMF Executive Board, with the aim of strengthening the voice and representation of Sub-Saharan Africa,” leaders declared during the G20 Southern Africa Summit in Johannesburg.
G20 leaders reaffirm the critical role of MDBs in supporting poverty reduction, economic growth and development across client countries.
“We welcome the inaugural Progress Implementation Report on the G20 MDB Roadmap by the Heads of Multilateral Banking Groups. We also recognize the potential of the Capital Adequacy Framework (CAF) to help MDBs use existing resources more efficiently, share more risks with the private sector and use new tools to increase lending capacity over the next decade, and recognize the need for MDBs to work continuously to implement the G20 Roadmap and CAF reforms.”
The G20 reiterated its commitment to a strong, quota-based and adequately resourced International Monetary Fund at the center of the Global Financial Safety Net.
“We support continued cooperation with the IMF’s Regional Financing Arrangements (RFA). We have advanced national approvals for quota increases under the 16th General Quota Review and look forward to completing this process without further delay. We recognize the importance of realigning quota shares to better reflect members’ relative positions in the world economy, while protecting the quota shares of the poorest members.” However, the G20 declaration stated that building consensus among members on quota and governance reforms would require gradual progress. Leaders of the G20 countries also expressed their commitment to the effective implementation of the G20 Roadmap for the Advancement of Cross-Border Payments and to take additional measures necessary to achieve its goals.
It also noted the important role of the Financial Stability Board (FSB) and international standard-setting bodies (SSBs) in developing sound financial standards and recommendations to monitor financial risks and vulnerabilities, maintain financial stability and enhance the resilience of the global financial system.
“We welcome the FSB’s thematic peer review on the implementation of top crypto assets and stablecoin recommendations and encourage the implementation of the FSB’s and other SSBs’ global regulatory framework in this context.
He noted that most members are aware of the importance of addressing climate-related financial risks, adding that these efforts are necessary to maintain financial stability while promoting responsible innovation.
On debt vulnerabilities, although the risk of a systemic debt crisis appears to be largely contained, many vulnerable low- and middle-income countries face high financing costs, large external refinancing needs and significant private capital outflows.
These debt vulnerabilities, among other factors, can constrain their fiscal space, their ability to address poverty and inequality, and their capacity to invest in growth and development.
“We welcome the recent progress made on the Common Framework and note that, five years after its creation, it provides debt treatments to four countries that requested it, namely Chad, Zambia, Ghana and Ethiopia.” he said.
