OPINION | Despite US boycott, G20 was ultimately a triumph for SA and Africa

By Hugh Hacking, Executive Head of Structured Investments and Annuities at Momentum Corporate

The recent G20 summit in Johannesburg, which included a final declaration, transcended the anticipated geopolitical storms. Despite the highly publicised boycott by the U.S. administration, the summit can be deemed a success from South Africa’s perspective, serving as a demonstration of global multilateralism and elevating the country’s status on the world stage.

South Africa’s participation in the G20, the premier forum for global economic cooperation, is often framed in purely economic terms. While South Africa’s GDP is not among the top 20 globally, its inclusion is based on a strategic, geopolitical, and economic rationale to ensure the G20’s global legitimacy and diverse perspective. The successful hosting of the summit, and the achievement of a consensus declaration against the backdrop of global division, cemented this rationale.

South Africa’s leadership, particularly in pushing the agenda for the African continent, has provided a crucial reputational “halo effect,” connecting us with the world’s major economies and finance ministers. This association is not merely symbolic; it strongly reinforces the perception of stability and global competence essential for attracting foreign investment and interest, fostering economic growth and securing the long-term stability of vital sectors, including pensions and annuities.

The fact that the G20 concluded with a final, agreed-upon declaration, which South African President Cyril Ramaphosa swiftly pushed through at the start of the summit, sends a clear message: the world can, and did, move on without the U.S. presence. This achievement not only secured global cooperation but also demonstrated South Africa’s decisive diplomatic capacity, positively reinforcing the modest, but significant, improvements in our economic outlook and our recent removal from the ‘grey list’.

The financial dividend: Pension stability and lower capital costs

The Finance Track of the G20, co-led by the National Treasury and the South African Reserve Bank (SARB), is where global policy translates into local, tangible benefits. The mandate for structured investments and annuity providers is stability and predictable returns.

The summit’s successful adoption of a declaration that included terms on debt reform and global financial architecture, which had been opposed by the U.S. ahead of the event, are not abstract victories. They directly support the reduction of high-risk premiums and volatility that can erode the purchasing power of an individual’s retirement savings over a 20-year horizon.

By successfully hosting the G20, South Africa’s advocacy for a lower cost of capital for the Global South received a megaphone on the world stage. This push is crucial for improving the national debt outlook, ultimately benefiting the local equity and bond markets and enabling fiscal surpluses to be redirected toward growth-driving infrastructure and the Just Energy Transition. A more fertile and stable environment is created for institutional investors globally, ensuring better outcomes for retirement fund members.

The Just Transition – From necessity to opportunity

The inevitable shift away from coal is one of the most significant economic diversification opportunities of our generation. The final G20 declaration, achieved under South Africa’s stewardship, included key language on “just energy transitions” and “climate change.” This is a win for South Africa’s commitment to a Just Energy Transition (JET), which requires massive, predictable, long-term capital flows.

The G20 forum is where the global frameworks are negotiated to safely allocate institutional capital – including retirement funds – into these projects while meeting fiduciary duties. This positions South Africa as an appealing destination for investment in alternative energy, green hydrogen, electric vehicle manufacturing, electric vehicle manufacturing and critical minerals.

The summit’s outcomes help finalise the frameworks that allow institutional capital to be deployed efficiently and safely into these projects. When these global talks translate into funded projects, we see a direct, positive feedback loop: more jobs mean more contributors to retirement funds, better growth means better investment returns, and a more stable base for the economy as a whole.

The price of principle and the triumph of multilateralism

The geopolitical storms, though significant, ultimately underscored South Africa’s importance. The U.S. boycott, stemming from domestic political and ideological grievances, failed to derail the summit. In fact, it spurred other nations to actively demonstrate that multilateralism can prevail.

The G20’s ability to agree on a declaration – including terms on “gender equality,” “just energy transitions,” and “climate change” – which the U.S. administration had previously opposed, highlights the newfound leverage and solidarity of the participating nations.

The attendance of the U.S. Chamber of Commerce at the B20 (the business arm of the G20) demonstrated that U.S. businesses recognise the immense opportunities that Africa, with its young and growing population, offers, despite the political rhetoric.

In the days leading up to the summit, the European Union announced a new minerals pact with South Africa and pledged billions of dollars toward renewable energy development in Africa, showcasing that key global partners were looking past differences to deepen alliances.

South Africa’s successful hosting of the G20 summit reinforces the long-term reality: we remain the key economic representative of the African continent on the G20 platform. The conversations we lead on debt sustainability, climate finance, and inclusive growth are critically important for half the world’s population.

A forward-looking narrative

As we move forward, the narrative must focus on this foundation of stability and growth. South Africa is not merely a beneficiary of the G20; it is an important contributor, using its unique position to shape a global economy that is more equitable and resilient. By showcasing the critical links between successful global dialogue, domestic economic upgrades, and strategic investments in the future, we reinforce a positive perception that is the best defence against short-term political headwinds.

Our economic outlook is intrinsically linked to our global engagement, and our G20 membership – and the success of the recent summit – is an indispensable tool for securing a stable, prosperous future for all South Africans.