South Africa has achieved a rare diplomatic success, securing consensus among G20 finance ministers and central bank governors on a joint communique, the first since October 2024.
The agreement was reached at the end of a two-day meeting in Durban, despite the absence of the U.S. Treasury Secretary, and was welcomed by investors, who responded by boosting South African assets, Business Insider reported.
The meeting, held under South Africa’s G20 presidency, ended on Friday with a statement addressing key global economic issues, including macroeconomic stability, central bank independence, and the need for multilateral cooperation.
The communique was issued amid mounting uncertainty in the global economy, driven by ongoing conflicts, trade tensions, and extreme weather events.
Markets responded positively. The rand strengthened by around 0.6% to trade at 17.7050 against the U.S. dollar.
The Johannesburg Stock Exchange’s Top-40 index rose 1.5%, while the broader All-Share index gained 1.4%, approaching record highs.
Mining stocks led the rally, Gold Fields rose 2%, Harmony Gold gained 1%, and Sibanye-Stillwater climbed 4%.
South Africa’s benchmark 2035 government bond also advanced, with its yield falling by 1.5 basis points to 9.945%.
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The communique, adopted under the presidency’s theme of “Solidarity, Equality, Sustainability,” was a significant achievement.
In past G20 meetings where consensus failed, only summaries or chair’s statements were released. This time, all members supported the final text.
South Africa’s Deputy Finance Minister David Masondo confirmed it was “consented to by all members” and said it focused on “strategic macroeconomic issues.”
A key part of the statement reaffirmed the importance of central bank independence, emphasizing that monetary policy decisions should be based on data and aligned with each central bank’s mandate.
This emphasis followed concerns raised during the meeting about U.S. President Trump’s repeated public attacks on Federal Reserve Chair Jerome Powell, which had unsettled global financial markets.
While the communique addressed broad global issues, it deliberately avoided specifics that might divide members.
It referred to “ongoing wars and conflicts” without naming Russia’s invasion of Ukraine or the conflict in Gaza.
Similarly, it acknowledged “extreme weather events and natural disasters” as major economic risks but did not directly mention climate change.
The statement supported the role of the World Trade Organisation in advancing global trade and called for its reform, but it notably avoided the term “tariff”, even as new U.S. trade measures, including baseline levies and additional duties affecting over 20 countries, are set to begin on August 1.
At just over 2,000 words, the document was shorter than the previous communique issued in October 2024, but it was still viewed as an important milestone.
South Africa’s Finance Minister Enoch Godongwana said, “To achieve what we have done in this environment, I take it as a huge success.”
Josh Lipsky of the Atlantic Council added that the joint statement reflected growing momentum ahead of the U.S. taking over the G20 presidency in December.
Attention now shifts to South Africa’s upcoming economic data, including May’s business cycle leading index and June’s consumer inflation figures, which may provide a clearer picture of the country’s economic health as Africa’s most industrialized economy.
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Image Credit: Business Insider Africa
