Leaders of 20 nations that were a part of the G20 South Africa Summit held in Johannesburg, declared their commitment to increasing their representation in decision-making, especially in Multilateral Development Banks (MDBs) like the World Bank and IMF and other international economic and financial institutions.
Affirming the critical role of MDBs in driving poverty reduction, economic growth, and development across client countries, the G20 group reaffirmed its commitment to a strong, quota-based, and adequately resourced International Monetary Fund at the centre of the Global Financial Safety Net.
“We welcome the inaugural Progress Implementation Report on the G20 MDB Roadmap by the Heads of MDBs Group. We further acknowledge the Capital Adequacy Framework’s (CAF) potential to help MDBs more efficiently utilise existing resources, share more risk with the private sector and utilise new instruments to increase lending capacity over the next decade and recognise the need for continued work by the MDBs to implement the G20 Roadmap and CAF reforms,” it said.
“In that context, we welcome the creation of a 25th chair at the IMF Executive Board to enhance the voice and representation of Sub-Saharan Africa,” the leaders’ declaration further said.
The leaders also committed to the implementation of the G20 Roadmap for Enhancing Cross-Border Payments that will inevitably enhance trade across the world.
“We support continued IMF collaboration with Regional Financing Arrangements (RFA). We have advanced the domestic approvals for our consent to the quota increase under the 16th General Review of Quotas, and we look forward to finalising this process with no further delay. We acknowledge the importance of realignment in quota shares to better reflect members' relative positions in the world economy while protecting the quota shares of the poorest members,” the declaration stated.
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When it comes to addressing climate-related financial risks, the collective said it realised their importance, and the fact that efforts are essential in safeguarding financial stability while promoting responsible innovation.
G20 leaders have also committed to engaging constructively to address concerns regarding global minimum tax and tax challenges arising from digitalisation of the economy, while preserving the tax sovereignty of all countries.
“We will continue engaging constructively to address concerns regarding Pillar Two global minimum taxes, with the shared goal of finding a balanced and practical solution that is acceptable for all as soon as possible,” said the G20 Summit declaration.
Calling for a new Organisation for Economic Cooperation and Development (OECD) framework that will enable interested jurisdictions to strengthen international tax transparency on immovable property on a voluntary basis, the group said that the delivery of a solution will need to include a constructive dialogue on the tax challenges arising from the “digitalisation of the economy”.
The G20 leaders also agreed that domestic resource mobilisation is the most effective funding source, and a structured approach to reform which is “country-owned, country-led”, while fulfilling the social contract with taxpayers would be valuable.
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