How BRICS can help Africa in its quest for 'unconditional' growth
For two decades, BRICS has grown its impact on the global economic and geopolitical landscape. Its existence as a counterweight to the dominance of the G7 countries makes other countries want to join the bloc.
Several African countries including Algeria, the Democratic Republic of Congo, Comoros, Morocco and Gabon, Egypt, Ethiopia, and Senegal have requested to join BRICS which is an acronym for Brazil, Russia, India, China, and South Africa.
The term was originally BRIC before South Africa joined in 2010 and now two African countries, Egypt and Ethiopia, will be invited to join the group from January 1, 2024.
The bloc, initiated by Russia, was founded as an informal club in 2009 to provide a platform for its members to challenge the dominance of the United States and its Western allies. Its founding members include Brazil, Russia, India, and China.
Why African leaders want to join BRICS
African leaders view the dollar’s dominance over the global financial system and the market as impeding their nations’ economic growth. The US interest rate hikes further intensify the continent's reason to break free from these constraints.
Unlike the World Bank and International Monetary Fund, the BRICS bank known as the New Development Bank, aims to reach 30 percent of lending in local currencies by 2026.
South Africa, for instance, has benefitted 100 billion rand, approximately US $5.3 billion from the BRICS bank which it used to fund its infrastructure projects. Egypt also joined the bank in February to help ease its greenback shortages.
African countries can grow with BRICS
With the BRICS de-dollarization concept aimed at increasing the use of local currencies in trade, it is no surprise that African leaders request an alignment with the bloc. What could go wrong with this concept is an increased use of the Chinese renminbi and already, African nations including Mauritius, Nigeria, and Zambia, already use the renminbi as a reserve currency. So again, what could possibly go wrong?
African leaders view the group as an alternative to global bodies like the World Bank and International Fund (IMF) which are hosted by Western powers and offer support with sometimes unfavourable conditions.
Alignment with BRICS will unlock benefits including development finance, increased trade, infrastructure development, and investment as indicated by South African President Cyril Ramaphosa. It will offer African countries the chance to gain a louder voice on the world stage. With BRICS accounting for more than 40 percent of the world’s population, and surpassing the combined GDP of the G-7 countries in 2023, it is possible.
Africa - BRICS trade
The BRICS are now Africa’s largest trading partners and in 2012 only, trade rose to as much as US $340 billion. The BRICS are also growing in their foreign direct investments in Africa, especially in the manufacturing and service sectors compared to the US and Europe. It is reported that the BRICS trade more with Africa than they do among themselves.
With Africa’s untapped agricultural sector, the opportunity for investments and the transfer of technology, BRICS is a strategic alternative for Africa to break free from Western influence.
