South African Reserve Bank Governor Lesetja Kganyago warned rising global debt poses a severe risk to worldwide financial stability. Speaking on the sidelines of the IMF and World Bank meetings in Washington, Kganyago said the Financial Stability Board elevated debt concerns to a top-tier global issue.
IMF projections suggest global public debt could surpass 100% of global output by 2029, potentially reaching 123% under adverse but plausible scenarios. “The issue of debt is not an emerging market problem,” Kganyago said, highlighting that developed economies also face mounting fiscal challenges.
Debt is expected to dominate discussions at the G20 meeting of finance ministers and central bankers, which concludes Thursday with a joint declaration. South Africa, preparing to hand over its G20 presidency to the U.S., focused on continuity, particularly elevating cross-border payments within the forum.
Civil society groups criticized South Africa’s leadership for slow progress on debt sustainability, urging deeper relief and reforms to global restructuring processes. IMF fiscal chief Vitor Gaspar warned of a potential fiscal-financial doom loop triggered by sustained borrowing and high interest rates.
Kganyago confirmed ongoing discussions with the incoming U.S. presidency on continuing the African agenda regarding debt relief and financing costs. “The declaration will show what they are taking from the previous presidency and what priorities they will bring in their term,” he said.
Highlighting successes under South Africa, Kganyago noted the unanimous adoption of cross-border payment reforms by the G20, including support from the United States. The meeting underscored debt as a global challenge, emphasizing cooperation between emerging and developed economies to prevent a repeat of post-war fiscal crises.
