South Africa has upgraded its participation in the Paris Club to prospective member, taking it a step closer to becoming the first African nation to fully join the group of wealthy creditors.
Africa’s most-industrialized economy will participate in all Paris Club meetings and have the option to become the group’s 23rd permanent member.
“In one or two years the country can become a full member, so this is a period of acclimatization,” a Paris Club official told reporters in a telephone briefing on Thursday. They declined to be identified in line with the group’s policy.
South Africa’s potential inclusion marks another shift for the Paris Club, which was founded in 1956 and constituted an informal grouping of mostly rich, western nations that dominated financing to the developing world. Since losing its position as the world’s main government creditor to China in the past decade, the club has expanded to include emerging economies such as Brazil and South Korea.
The Paris Club is trying to coordinate global efforts to avert a slew of debt defaults among poor nations as international credit dries up with rising interest rates in the developing world. South Africa has taken a leadership position in the continent to raise funds to help fiscally vulnerable countries still struggling to recover from the coronavirus pandemic.
South Africa became an ad-hoc member of the club in 2015 and participated in 13 debt negotiations as a creditor since the 1980s.