Brics and Africa partnership

The acronym Bric standing for Brazil, Russia, India and China  did not initially include South Africa and was coined in 2001 by then Goldman Sachs chief economist Jim O’Neill in a research paper that underlined the growth potential of the four countries.

The group was established in 2009 and South Africa joined in 2010 to form Brics as it is known today. Its main goal was economic cooperation, thus ,encouraging trade, cooperation and growth among member States as well as improving their economic access to markets.

The Brics  three- day summit that ended in Johannesburg, South Africa in August 2023 has positioned itself as an alternative to the Western-dominated global order. According to the International Monetary Fund (IMF), the bloc will collectively account for 32.1 percent of global gross domestic product (GDP) this year and more than the G7’s share of 29.9 percent.”

The debate about Brics expansion bloc toppled the agenda at the summit. However, some experts say there is a division within the five-member States. Brazil and India fear the expansion will dilute their influence and impact their non-aligned polices while China and Russia would like to position the body as a counterweight to the G7 and other Western-led alignments.

Many countries have expressed interest to join the group. Meanwhile, Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and United Arab Emirates  have been invited to become members. South Africa President Cyril Ramaphosa emphasised that his country supports Brics expansion and partnering with Africa to unlock trade, investment and infrastructure development. South Africa is an influential regional power and gateway to Africa for the Brics.

But is the Brics and Africa a win-win partnership?

Let us look at some of the factors that have motivated Brics and Africa to engage in partnership.

Lucrative emerging market:

Africa has a billion of untapped consumer market with a base representing an attractive return on investment. Africa is offering Brics the opportunity to diversify towards new frontier markets. The persistent global financial crisis largely due to effects Covid -19 and the ongoing Russia-Ukraine war have made Brics to shift a portion of their investments toward other emerging destinations to maximise returns while reducing risks. Sectors such as telecommunications, financial services, manufacturing, transport, clean energy, education, technology, construction and retail have recorded high rates of growth in most African countries due to high demand.

Abundant natural resources

Africa is endowed in vast natural resources and yet it remains a continent with the poorest nations in the world. Brazil and China are the most active in exploring and exploiting gas, oil and mineral resources in many African countries, including Angola, Democratic Republic of Congo and Sudan. Some experts say Brics involvement in Africa is driven by the appetite for the continent’s abundant natural resources. However, Brics’ presence in this sector has brought to the continent investment in various infrastructure projects in recent years like manufacturing and service.

New funding model

In 2015, Brics set up their own bank to offer members a greater say in financing infrastructure than in Western-led institutions like the IMF and World Bank. These offers were not only attractive to the Brics nations themselves, but also to other developing and emerging economies that had painful experiences with the IMF’s structural adjustment programmes and austerity measures. Many countries, including in Africa, are trying to join Brics group primarily to get better deals in project funding thereby boosting the group’s investments.

Agricultural sector

Africa has vast unused land, good climate and plenty of fresh water that can be used for consumption and irrigation. The engagement of Brics countries in the African agricultural sector will promote their experience and expertise in agricultural development to unlock the continent’s potential. Brazil, which is a leading global player in trading agricultural commodities, can be a model for Africa by sharing agri-business experiences. Fostering agriculture can assist Africa in enhancing agricultural productivity to feed herself and reduce the impact of food insecurity.

We hope this partnership will unlock the economic benefits,  including increased trade opportunities, development finance, foreign direct investment and access to technology for accelerated growth across Africa, thereby eradicating poverty and chronic hunger over the long-term.