BRICS wants to eat the G7's lunch

In recent years, the BRICS bloc has emerged as a powerful force in shaping the global economy. It has gate-crushed the G7 party and welcome-or-not is serving itself to the buffet.

Initially comprised of Brazil, Russia, India, China, and South Africa, BRICS has added Argentina, Egypt, Ethiopia, Iran, the United Arab Emirates and Saudi Arabia as full members.

Africa is particularly looking forward to a positive impact from BRICS, where the bloc seeks to actively engage in fostering economic transformation and development. The inclusion of two more African countries, Ethiopia and Egypt reinforces the envisaged partnerships for integration and industrialization between BRICS and Africa.

This article delves into the various facets of BRICS' influence on African economies and its implications for global economic development.

You can also check our previous article on BRICS here.

Exploring the Impact of BRICS on African Economies

BRICS is an important partner for Africa in its quest for economic transformation.

One key area where BRICS member countries have made a significant impact is infrastructure development. China, in particular, has emerged as a major investor in African infrastructure projects, such as railways, ports, and energy facilities. This has not only enhanced the connectivity within Africa but also opened up new avenues for trade and economic integration.

The construction of new railways has facilitated the transportation of goods and people, boosting intra-African trade and creating employment opportunities. The development of modern ports has improved logistics and made it easier for African countries to export their products to global markets. Additionally, the establishment of energy facilities has helped address the energy deficit in many African nations, providing reliable and affordable power for industries and households.

In addition to infrastructure investment, BRICS has also played a crucial role in driving technological innovation in Africa. India and China have been at the forefront of providing technological solutions to address challenges faced by African nations.

BRICS is expected to actively promote capacity building and human resource development in Africa. Through scholarships, training programs, and cultural exchanges, BRICS can help enhance the skills and knowledge of African professionals, enabling them to contribute more effectively to their respective economies.

By providing scholarships to African students, BRICS can enable them to pursue higher education in various fields, including science, technology, engineering, and mathematics. Through training programs, BRICS can facilitate the transfer of expertise and best practices, strengthening the institutional capacity of African governments and organizations.

The impact of BRICS on African economies is multi-faceted. Through infrastructure development, technological innovation, and capacity building, BRICS has and is set to contribute to the growth and transformation of African nations. As the partnership between BRICS and Africa continues to evolve, it holds the potential to further accelerate economic development and foster sustainable progress across the continent.

Assessing the Role of BRICS in Global Economic Development

The combined economic strength of BRICS countries has the potential to shape the global trade landscape. With their vast consumer markets and rising middle class, BRICS nations are becoming key drivers of global demand. The bloc represents around 46% of the world population, accounting for 29% of the world’s GDP in nominal terms and 37% of GDP at purchasing power parity.

BRICS countries have also been instrumental in advocating for a more inclusive and multipolar global economic order. Through platforms like the BRICS Summit and the New Development Bank, these nations have sought to challenge existing power dynamics and promote greater representation for emerging economies in global decision-making.

BRICS has emerged as a strong voice in addressing global challenges such as climate change and sustainable development. By collaborating on initiatives like the BRICS Clean Energy Research Platform and the BRICS Sustainable Urbanization Cooperation, these nations are working together to find innovative solutions to pressing global issues.

Leveraging BRICS to Drive Economic Diversification in Africa

One of the key challenges facing many African nations is the overreliance on a narrow range of commodities for export. This makes their economies vulnerable to price volatility and external shocks. BRICS countries offer opportunities for economic diversification through trade and investment in non-traditional sectors.

There is a growing interest in expanding trade beyond primary commodities and venturing into sectors like manufacturing, technology, and services. By leveraging their partnerships with BRICS nations, African countries can tap into these sectors and move up the value chain.

BRICS countries have extensive experience in building industrial and manufacturing capabilities. By collaborating with BRICS nations on knowledge exchange, technological transfer, and joint ventures, African countries can accelerate their industrialization efforts and create more job opportunities.

Exploring the Potential of BRICS for African Entrepreneurship

Entrepreneurship is an essential driver of economic growth and job creation. BRICS member states recognize the importance of entrepreneurship in their economies and are now extending support to African entrepreneurs.

India launched various initiatives to foster entrepreneurship in Africa, such as the India-Africa Entrepreneurship Development Program and the India-Africa Innovation Bridge. These programs provide African entrepreneurs with access to funding, mentorship, and market linkages, enabling them to unleash their innovative potential and contribute to economic transformation.

Similarly, China has been actively promoting entrepreneurship through initiatives like the Forum on China-Africa Cooperation and the China-Africa Innovation and Entrepreneurship Competition. These platforms bring together African and Chinese entrepreneurs, investors, and policymakers to explore potential business collaborations and investment opportunities.

Youth unemployment is a pressing issue in many African countries. China has been investing in Africa's education sector, offering scholarships and exchange programs to African students. By investing in the education and skills development of African youth, BRICS countries will be sowing the seeds for future economic growth and prosperity.

BRICS: New Horizons for Investment and Trade in Africa and Beyond

Africa is a major destination for Chinese investment in sectors like mining, construction, and manufacturing. This has helped create new employment opportunities and stimulated economic growth.

Through initiatives like the BRICS Trade Fair and the BRICS Business Council, the BRICS bloc is working towards enhancing trade ties and creating a more conducive business environment for companies operating in Africa.

A new entrant to the BRICS bloc, Saudi Arabia is also a member of the African Development Bank. The Saudi Development Fund has contributed to the concessional financing of development projects in several African countries, with no specific restriction on regions or sectors. Most Fund loans, particularly for infrastructure, went to Morocco, Algeria, Tunisia, Egypt, Mauritania, Senegal, and Sudan.

Trade Patterns Within BRICS: Exports and Imports

Understanding the trade patterns within the BRICS bloc is crucial for African countries seeking to expand their exports and tap into new markets. Each BRICS country has its own unique strengths and demands.

Brazil is a major exporter of agricultural products and commodities. African countries with a strong agricultural base can explore trade opportunities with Brazil to expand their export markets.

China, as the world's largest exporter, presents immense potential for African countries looking to access global markets. African countries can leverage China's manufacturing capabilities and consumer demand to export value-added products.

Russia, on the other hand, is known for its natural resources and energy sector. African countries with abundant natural resources can explore partnerships with Russian companies to enhance the value chain and increase export earnings.

India, with its diverse economy, offers a wide range of trade opportunities in sectors such as information technology, pharmaceuticals, and services. African countries can tap into these sectors to diversify their export base and create new avenues for economic growth.

The United Arab Emirates (UAE) is the fourth-largest investor in Africa globally. About $1,2bn was invested into Sub-Saharan Africa between 2016 and 2021 by the UAE alone. The UAE which imports over 80% of its food requires an effective, ongoing partnership with Africa to sustain its food security, particularly against the backdrop of the continued effects of the Russia-Ukraine conflict on commodity supplies and prices.

BRICS has emerged as a catalyst for economic transformation in Africa and beyond. Through increased trade, investment, and collaboration, BRICS countries have helped stimulate growth, drive diversification, and unlock new opportunities for employment and entrepreneurship in African economies. As the global economy continues to evolve, BRICS will play an increasingly vital role in shaping the future of economic development, not just in Africa but across the world.