WASHINGTON/JOHANNESBURG: South African Reserve Bank Governor Lesetja Kganyago stated that developing nations should be able to challenge ratings agencies’ methodologies to ensure greater transparency.
He made these remarks at a press conference following the conclusion of the Group of 20 finance chiefs meetings in Washington.
Kganyago explained that transparency in ratings could yield better outcomes for developing countries.
“If we are able to take their methodology and take the data they are using and see whether we are able to replicate it... we can actually engage them and challenge them based on their methodology and say that your rating is wrong,“ he said.
South Africa committed to address the elevated cost of capital for developing economies during its G20 presidency.
This commitment included examining the role that rating agencies play in capital costs.
However, the proposed commission to examine these concerns remains unestablished.
The initiative sought to explore barriers to affordable and predictable capital flows for development.
During the fourth meeting under South Africa’s G20 presidency, finance ministers issued a Chair Summary instead of a formal communique.
This recurring feature occurs when consensus is not reached in multilateral discussions.
The summary highlighted global economic resilience but identified several significant risks.
These risks included geopolitical tensions, supply chain disruptions, elevated debt levels, and severe weather events.
The statement emphasized the importance of addressing excessive imbalances, particularly for developing economies.
“Given the challenges of high public debt and fiscal pressures, members acknowledged the importance of pursuing growth-oriented macroeconomic policies to enhance long-term growth potential,“ the Chair Summary noted.
The group also addressed the unequal development of artificial intelligence across developing nations.
Discussions advanced on innovation’s transformative potential for global development.
The statement underscored the need for reforms at multilateral development banks to expand lending capacity.
It also emphasized amplifying developing countries’ influence in decision-making processes.
South Africa will hand over the G20 presidency to the United States in November. – Reuters
