AFRICA should capitalise on the advantages presented by BRICS, to ward off restrictions from developed countries, in order to accelerate economic growth.
It can now turn to the BRICS platform to engage more with like-minded developing countries. In the long-term, this will only benefit African countries. BRICS is a group of developing countries and is an acronym for Brazil, Russia, India, China and South Africa. It also represents their growing importance within the global economy. While Brazil, Russia and South Africa have been recovering from economic difficulties, China and India are surging ahead with relatively high growth. According to World Bank data, China grew at 6.9 percent and 6.7 percent during 2015 and 2016, respectively, while the economic growth in India was at 8 percent and 7.1 percent during that same period.
As for the African continent, it has been growing at a relatively fast pace since 2000. Hence, South Africa, as the biggest economy within Africa in the early 2000s, was eventually admitted in late 2010, to have better representation with BRICS. In 2013, South Africa hosted the BRICS summit in Durban. It will again have this privilege to organise the summit and host all the other BRICS members in Johannesburg in 2018. This will be a great opportunity to focus global attention on South Africa and the continent as a whole.
Moreover, to enhance South- South cooperation, the Chinese Foreign Minister Wang Yi put forward the idea of ‘BRICS Plus’, whereby economic cooperation and integration among the main BRICS group can be extended to other countries. Although this initiative is still at its inception, there may be future possibilities of having more African countries joining the BRICS group. Not only will they then have greater opportunities to interlock with the bigger developing countries, but they may also have better access to funding for their economic development.
It was after the global financial crisis in 2008, and during the first 2009 BRIC summit, that Brazil, Russia, India and China voiced the need for better cooperation among developing countries, since all the major international financial institutions are controlled by developed nations.
During the 2012 summit in New Delhi, India mooted and pushed forward the idea of having a common bank to support and fund the economic development and infrastructure needs of the members. Eventually, in 2014, during the sixth summit in Brazil, all five members signed an agreement for the creation of the New Development Bank with capital of US$100 billion.
Subsequently, it was agreed that the New Development Bank would be headquartered in Shanghai, China, while Kundapur Vaman Kamath from India was appointed as its president.
South Africa, being a founding member of the New Development Bank, is represented on the board of the bank, with the current appointment of Dondo Mogajane. It can now access bigger funds for its development. Furthermore, the first Africa regional office of the New Development Bank was launched in Johannesburg last month.
In 2016, the New Development Bank had disbursed US$1.5 billion to fund mainly green projects, like renewable energy generation. For 2017, the bank aims to provide up to US$3 billion in financing to the member countries. And by 2021, up to US$15 billion is targeted to be dispensed to relevant projects. In the future, if other African countries have the possibility to be more involved with the BRICS group, the New Development Bank can be an alternative source for major project financing.
The developing countries of the world will be the engine for future global growth and there is a need to intensify the South- South cooperation. BRICS is a multilateral platform that Africa can use wisely to engage with the other big emerging economies. With the developed nations turning more inwards, the developing countries will have to turn and look after each other for support. While Africa has currently more significant links with China and India, BRICS provides an avenue for Africa to reach out to Brazil and Russia, as well.
The two biggest BRICS members, China and India, also have big plans for the future. In 2013, Chinese President Xi Jinping launched the Belt and Road Initiative (BRI), with major projects in 65 other countries, including in Africa. Recently, India collaborated with Japan to create the Asia-Africa Growth Corridor (AAGC). Both plans will only bring positive economic spillovers to Africa.
Overall, what this means for Africa is that while it is facing restrictions from developed countries, it can now turn to the BRICS platform to engage more with like-minded developing countries. In the long-term, this will only benefit the continent.
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