G20 meeting of finance ministers and central bank governors in Durban
Last Friday, the third meeting of G20 finance ministers and central bank governors came to an end in Durban, South Africa.
From Germany, Finance Minister and Vice-Chancellor Lars Klingbeil and President of the German central bank, Dr Joachim Nagel, were among those who took part in the two-day meeting. The summit was overshadowed by numerous cancellations, including from India, Italy, France and Russia. US Treasury Secretary Scott Bessent also stayed away from the summit. Although the US will take over the G20 presidency from South Africa in December 2025, it was represented only by Michael Kaplan, the Under Secretary of the Treasury for International Affairs.
The talks focused on reforming the international financial architecture, which also shaped the joint Finance Track Communiqué. The G20 finance ministers and central bank governors spoke out in favour of a strong, quota-based International Monetary Fund (IMF). The aim is to achieve stronger representation for countries in the so-called Global South without jeopardising the shares and voting rights of poorer countries. However, no agreement could be reached on specific quota reforms. According to the final declaration, the World Trade Organisation (WTO), whose role in rules-based trade was emphasised, is also in need of reform. A comprehensive overhaul of its functions, for example in dispute settlement and transparency issues, is urgently needed. In international debt policy, countries with sustainable but strained budgetary situations are to receive more targeted support in future. To this end, the IMF and the World Bank are to develop practical solutions for short-term liquidity problems. In addition, the participants emphasised the importance of sustainable financing and innovative instruments for mobilising private investment, especially for climate projects.
Particular emphasis was also placed on the independence of central banks – a signal directed specifically at Washington. This comes against the backdrop of repeated public attacks by US President Donald Trump on the chairman of the US Federal Reserve, Jerome Powell. The final communiqué emphasised that monetary policy decisions by central banks must be independent, data-driven and in line with their respective mandates.
At the summit, Finance Minister Lars Klingbeil announced that he would provide an initial tranche of ten million euros as part of the G20 Compact with Africa Initiative, which was launched in 2017 under the German G20 presidency. These funds are to be channelled through the World Bank into African reform and investment partnerships. Klingbeil also announced the establishment of the North-South Commission, which is enshrined in the coalition agreement. The aim of the dialogue forum for representatives from politics, business, civil society and academia is to shape global development cooperation in an equitable and solution-oriented manner. South African Finance Minister Enoch Godongwana pointed to the successes of the Compact with Africa: since the initiative began, more than 191 million US dollars in private investment has been mobilised and access to services has been improved for more than 13 million people. At the same time, he pointed to ongoing structural challenges such as high debt levels, limited fiscal space and lack of access to long-term capital.
In terms of content, the final declaration of the G20 meeting in Durban builds on the principles for reforming the global financial architecture agreed upon in Washington in April. Although the G20 final document is not binding, it is generally regarded as a success – especially since no consensus could be reached at the meeting in Cape Town in February. Terms such as ‘climate change’ and ‘tariffs’ were not mentioned in the final document. The finance ministers and central bank governors of the G20 countries will now meet again in Washington in October to prepare the next steps and the handover of the G20 presidency to the United States. The G20 summit of heads of state and government is scheduled for November in Johannesburg. The meeting of G20 development ministers is also still ongoing, with Federal Development Minister Reem Alabali Radovan travelling to Skukuza, South Africa, as part of her first trip to Africa.
Rising Tensions Between Ethiopia and Eritrea
On Saturday, Eritrea’s President Isaias Afwerki warned in a television interview of a possible escalation of the conflict with Ethiopia and accused the government in Addis Ababa of making military preparations for war. He emphasised that Eritrea was not seeking conflict, but would defend itself if war were forced upon it. He also accused the United Arab Emirates (UAE) of supporting Ethiopia’s plans for sovereign access to the sea and deliberately destabilising the Horn of Africa region in order to expand its influence. Analysts view Afwerki’s statements as a foreign policy turning point and the official end of relations between Eritrea and Ethiopia.
One of the triggers for the growing tensions is Ethiopia’s goal of regaining access to the Red Sea. With Eritrea’s independence in 1993, Ethiopia lost its coastline. Ethiopian Prime Minister Abiy Ahmed has recently described sovereign access to the sea as an ‘existential necessity’ for his country on several occasions. Last year, Ethiopia signed a controversial agreement with the de facto autonomous region of Somaliland on port access, which led to tensions with Mogadishu (Press Review CW 2/2024). Following this initially failed attempt, there is now growing concern in Eritrea that the Eritrean port city of Assab could once again be targeted. According to reports, Ethiopia has now deployed troops to the border areas, while Eritrea has stepped up its conscription of young people into military service. In a speech to parliament on 3 July, Abiy emphasised that Ethiopia wanted to secure access to the sea peacefully but was prepared to defend itself.
Ethiopia’s ambitions and the tensions associated with them are also affecting the geopolitical balance in the region. This is also evident in Afwerki’s accusation that the UAE is supporting Ethiopia’s plans as part of a so-called ‘master plan’ with which the Emirates want to expand their influence in the region and push back Saudi Arabia. This geopolitical rivalry is also evident in Sudan, where the UAE and Saudi Arabia back opposing sides in the conflict. Eritrea has recently moved closer to Riyadh and Cairo, while Egypt remains locked in a dispute with Ethiopia over the GERD dam project, which Cairo views as a threat to its water supply.
Another source of tension is the unstable situation in the border region of Tigray. During the Ethiopian civil war from 2020 to 2022 (Press Review CW 46/2020 and CW 44/2021), Eritrea provided military support to the central government against the Tigray People’s Liberation Front (TPLF). Although the Pretoria Agreement, signed in 2022, officially ended the fighting, it excluded Eritrea from the process. In particular, the agreement’s deadline for disarming the TPLF-aligned Tigray Defence Force (TDF), as well as the lack of implementation and oversight of these measures, caused resentment in Asmara.
The situation in Tigray remains fragile. In March of this year, an internal power struggle within the TPLF escalated, leading to a split in the movement. According to reports, the Ethiopian central government and Eritrea are backing different factions. There are also claims that Eritrean forces are training Ethiopian militias such as Fano, which launched an offensive against government troops in March. In a letter dated 20 June to UN Secretary-General António Guterres, Prime Minister Abiy accused both Eritrea and the TPLF of planning joint offensives in the coming weeks.
For Prime Minister Abiy, the escalation comes at a politically sensitive time, with national elections scheduled for next year. Observers warn that both the situation in Tigray and the dispute over access to the sea could be politically instrumentalised—used to rally nationalist support or to weaken rival forces. At the same time, regional and international concerns are growing over a potential escalation between Ethiopia and Eritrea, with fears that Tigray could once again be caught in the crossfire.
In other news
On Saturday, Zimbabwe won the Rugby Africa Cup 2025 in Kampala, Uganda. The Sables defeated Namibia 30-28 in an exciting final, defending their title from last year. This marks Zimbabwe’s third victory in the Rugby Africa Cup, which has generally been held every two years since 2000, although the cycle was temporarily disrupted by the coronavirus pandemic. With this triumph, the team has qualified for the Rugby World Cup for the first time since 1987 and 1991. The 2027 tournament will be held in Australia and, for the first time, will feature 24 teams – four more than in previous editions. In addition to Zimbabwe, South Africa, the 2023 Rugby World Cup champion, has also already qualified. Namibia, which has qualified for every Rugby World Cup since 1999 and is one of the most successful rugby nations on the African continent, has one last chance to secure a ticket to Australia: the team must defeat the United Arab Emirates this Saturday to qualify for the final global qualifying tournament in November.