The Group of Twenty (G20) has urged Multilateral Development Banks (MDBs) to enhance their collaboration and efficiency while working with relevant stakeholders to implement the G20 Roadmap for Bigger, Better and More Effective MDBs.
This initiative builds on the legacies of previous G20 Presidencies and aims to strengthen MDBs ability to support global development efforts.
The roadmap is designed to assist countries to meet the United Nations (UN) Sustainable Development Goals (SDGs), as well as to address global and regional challenges with a renewed sense of urgency and determination.
This call comes as the global community is struggling to meet the goals of the Paris Agreement and advance SDGs, which are a universal call to action to end poverty, protect the planet and ensure that by 2030, all people enjoy peace and prosperity.
According to the G20 Chair’s Summary of the first Finance Ministers and Central Bank Governors' Meeting that took place in Cape Town from 26 February -27 February 2025, the meeting discussed the work plan of the International Financial Architecture Working Group (IFAWG) and its focus on four priority areas.
These include strengthening MDBs and ensuring financing for development; enhancing debt sustainability and addressing liquidity challenges; strengthening the Global Financial Safety Net (GFSN) and reforming global governance institutions; and enhancing financial resilience by strengthening capital flows to emerging market and developing economies (EMDEs).
The meeting recalled that the IFAWG was tasked to work with the MDBs to develop a monitoring and reporting framework, with clear indicators, for periodic updates on MDBs’ progress against the Roadmap’s recommendations.
“[The meeting] encouraged MDBs to work with developing countries in enhancing domestic resource mobilisation and increasing private capital investment by supporting enabling conditions, addressing potential obstacles to private investment, and scaling up both innovative risk-sharing instruments and country platforms.
“[The gathering] recognised that the Roadmap encourages MDBs to take steps towards the implementation of all appropriate outstanding Capital Adequacy Framework (CAF) recommendations, safeguarding their long-term financial sustainability, robust credit ratings and preferred creditor status.
“[It also] recalled that the board of each MDB will be best placed to determine if and when a capital increase is needed in addition to CAF measures to support efforts in addressing global challenges and meeting development needs,” the statement said.
The G20 said that it looked forward to progress with the International Bank for Reconstruction and Development 2025 Shareholding Review in line with the Lima Shareholding principles and recognised the need for enhancing the representation and voice of developing countries in decision-making in MDBs and other international economic and financial institutions.
Transparency and sustainable capital flows
In addition, the meeting looked forward to improvements in the implementation of the Common Framework for Debt Treatments, in a predictable, timely, orderly, and coordinated manner, informed by the recommendations from the G20 Note on the Lessons Learned.
It welcomed joint efforts by all stakeholders to continue working towards enhancing debt transparency.
“[The meeting] encouraged the International Monetary Fund (IMF) and World Bank to continue their work related to feasible options which are country-specific and on a voluntary basis to help vulnerable countries with near-term liquidity challenges whose debt is sustainable.
“[It also] reiterated the commitment to a strong, quota-based, and adequately resourced IMF at the centre of the GFSN.
“[The meeting ] acknowledged the urgency and 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; and the IMF Executive Board’s ongoing work to develop by June 2025 possible approaches as a guide for further quota realignment, including through a new quota formula, under the 17th General Review of Quota,” the statement said.
Furthermore, the G20 encouraged IMF members with strong external positions, especially those who have not already contributed, to make additional voluntary contributions to the Poverty Reduction and Growth Trust and the Resilience and Sustainability Trust.
It continued to invite countries that were willing to voluntarily explore channeling Special Drawing Rights, including through MDBs, where legally possible, whilst respecting their reserve asset status.
“[The meeting] reiterated efforts to promote sustainable capital flows to EMDEs and foster sound policy frameworks, notably through central bank independence. [They also] recognised the growing importance of non-bank financial institutions (NBFIs) and planned to deepen the understanding of their role in shaping EMDE investment flows,” the statement said. -SAnews.gov.za
