By Lesedi Sibiya-Diplomatic Inside

Minister of International Trade Relations and Cooperation Ronald Lamola and Minister of Trade, Industry and Competition Parks Tau have arrived in Paris as part of South Africa’s delegation to attend the Organisation for Economic Cooperation and Development (OECD) ministerial meeting taking place from 3 June-4 June 2025. This ministerial meeting will address the 500% premium that African countries must pay in order to access international capital which was stated as per African Development Bank Group (AfDB) economic outlook 2024 report.

The key factors that will be discussed in this ministerial meeting is Africa’s debt cost crisis where Ministers Ronald Lamola and Parks Tau will aim to highlight that African countries incur 500% higher rates on global bonds compared to multilateral loans from the World Bank and AfDB and they will aim to emphasize the OECD-G20 collaboration to review this gap. In preparation for the G20 summit South Africa has used their presidency of G20 to propose certain airtight reforms to unlock affordable capital for climate-resilient infrastructure. South Africa’s G20 Presidency has further emphasized that multilateral cooperation cannot be optional, it is essential because if there is reliance on unilateral cooperation that this could set back the progress in Africa’s economic reform. Multilateral financing for Africa’s economic development will catalyze the process of a sustainable economic future for Africa, which will be difficult if these current high premium interest rates remain implemented. “Our presence in Paris signals South Africa’s commitment to dismantle financial barriers hampering Africa’s sustainable development, Africa’s prosperity cannot be deferred.” Minister Lamola said in a statement. Minister Parks Tau also issued a statement saying “South Africa’s engagement with the OECD is aimed at achieving four strategic aims namely: Higher Investment, Inclusive economic growth, a prerequisite for addressing unemployment, poverty and inequality.”

South Africa’s involvement with OECD is extensive as South Africa is Africa’s largest economy and has been working with OECD in matters such as Macroeconomic policy and structural reform, debt management, fiscal policy, public governance, anti corruption and tourism. South Africa has been defined as a key partner to OECD since 2007 along with other countries such as Brazil, China, Indonesia and India. On 16 July 2023, the OECD and South Africa signed a memorandum of understanding for their first joint Work Programme and its purpose will be aimed at highlighting South Africa’s economic potential, ensuring better and sustainable lives for South Africans while keeping in line with the country’s development priorities as well as bringing the country closer to OECD standards and practices. The OECD and South Africa will cooperate in context to this year’s G20 summit in November.

The delegates will meet today for this discussion with hopes to lessen the current premium interest rates that Africa have to pay to access international capital, as these interest rates continue to hold back Africa’s sustainable economic growth.