By GVCA
South Africa’s 2025 G20 presidency successfully leveraged its platform to steer the conversation about private capital and development finance to a new direction. This G20 was marked by significant breakthroughs including the release of empirical data to correct the continent’s crippling cost of capital and a call to action to widen the solution space to unlock trapped capital including blended finance. The most profound shift was the structural embedding of African priorities into the G20’s financial agenda. The 2025-2030 G20 Africa Engagement Framework ensured that Africa’s core concerns – debt, domestic resource mobilisation, fair finance – are integral to global financial governance; an acknowledgement that the current global system is dysfunctional, particularly in its treatment of emerging markets.
The G20 communiqué outlined urgent action on:
Fairer debt management – The need for predictable, transparent, and unbiased risk assessment is now a G20 commitment, directly challenging the opaque mechanisms that perpetuate high borrowing costs.
Financing human capital – Explicit commitments were made to financing that protects investment in health, education, and climate resilience, recognising these as essential prerequisites for economic stability and productive labor.
This consensus signalled the appetite for a fundamental overhaul of how multilateral institutions and private lenders perceive, price, and structure African deals.
Correcting the cost of capital
The prevalent rhetoric around risk pricing was dismantled by hard data. The G20 Cost of Capital Framework, a fiduciary initiative that evidences the structural mispricing of African and emerging market assets, spearheaded by Dr. Hubert Danso, demonstrated that outdated emerging market risk systems and limited access to investor-grade data have erased more than $6 trillion in global portfolio returns over the past two decades.
The key takeaway for investors is that the supposed “risk premium” is, in many cases, a data and bias premium. Integrating market data with new sovereign-risk datasets (like GEMs3.0 modelling) shows how transparency corrects this pricing gap making it clear to investors that allocating assets to these markets under corrected pricing is a strategic investment in untapped value. This also provides an essential private-capital mobilisation lever for the global climate finance agenda.
G20 Ideas Bank (T20) spotlights innovative finance models from Africa and the diaspora
The G20 spotlighted investors and ecosystem builders harnessing and deploying domestic institutional capital. The high-level T20 side event, “Unlocking Trapped Capital,” challenged investors, funders and policymakers to adopt a systemic overhaul that aligns a wider range of capital with sustainable development.
The event focused on Resilience Capital Ventures’ Triple B Framework which tackles key barriers to development financing namely: Bottlenecks (addressing regulatory friction and structural impediments), Blindspots (eradicating the cognitive biases that perpetuate extractive investment mindsets), and Blended Finance (creatively correcting the misalignment of current capital stacks).
This framework represents a powerful call for South-South collaboration and multi-stakeholder governance to mobilise institutional capital by re-anchoring finance in local realities, and acts as a roadmap for private investors seeking overlooked opportunities.
Investing in women and youth
The G20’s commitments on employment and equity translate directly into measurable market opportunities for investors focused on human capital and inclusive growth and included a pledge to cut the youth NEET (Not in Education, Employment, or Training) rate by 5% by 2030, reduce the gender labour force gap by 25% and narrow the wage gap by 15%.
For a continent where youth and women constitute the majority, these signal underexploited markets in education technology, skills training, digital finance, and women-led enterprises, presenting an opportunity to transition from short-term extractive deals and projects to long-term value creation by investing in the productivity of Africa’s labour force, powered by local expertise, innovation, and long-term, patient investments.
A paradigm shift towards innovative finance
The G20 South Africa 2025 presidency has delivered the policy framework and various pieces of evidence needed for a paradigm shift. Decision makers from the private capital and development finance spaces now have the data, tools and frameworks to allocate capital in new ways with investment vehicles and blended capital stacks designed to transform the financial and funding systems that are not fit for purpose.
The G20 communique now serves as a high-level tool for accountability, mandating private equity, development finance institutions, and bilateral partners to abandon outdated risk models and the short termism that has failed to ‘develop Africa.’ The legacy of Ubuntu in South Africa’s G20 depends on the consistency, innovation and radical collaboration needed to translate these commitments into the billions of dollars of investment required to create decent jobs and build resilient economies.
