South Africa, as the current G20 President, plans to advocate for looser global capital requirements for banks. The goal is to empower African banks to increase lending for the continent’s significant infrastructure needs.
The G20, an international forum of developed and developing nations, focuses on global economic and financial issues. South Africa’s presidency, which began on December 1, 2024, and runs until November 30, 2025, is themed “Solidarity, Equality and Sustainability.”
According to Sim Tshabalala, co-chair of the Business 20’s Finance and Infrastructure Taskforce (part of the G20) and CEO of Standard Bank, Africa faces an $85 billion annual infrastructure funding gap. He emphasizes that relaxing the stringent Basel III capital requirements is crucial for African banks to help close this gap. Basel III, introduced after the 2007-09 financial crisis, mandates banks to hold a minimum amount of capital based on the risk associated with their assets. Tshabalala argues that lowering these requirements would enable banks to undertake more projects.
However, South Africa clarifies that this push for reform isn’t a free pass for governments to rely solely on bank capital for infrastructure. Tshabalala also stressed the importance of governments reducing the cost of capital, improving transparency, and strengthening fiscal and monetary management to attract private sector investment.
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