34.6 C
Lagos
Monday, February 10, 2025

spot_img

Nigeria Joins BRICS as Partner

Siaka MOMOH

Thirteen new nations, including Nigeria, has officially joined BRICS as partner countries, though not as full members.

The announcement was made during the BRICS summit held in Kazan, Russia, from October 22 to 24, 2024.

The 13 countries are Algeria, Belarus, Bolivia, Cuba, Indonesia, Kazakhstan, Malaysia, Nigeria, Thailand, Turkey, Uganda, Uzbekistan, and Vietnam.

?BRICS, an acronym for Brazil, Russia, India, and China, expanded in 2010 to include South Africa. The group has since added Egypt, Ethiopia, Iran, and the United Arab Emirates as full members, all of whom attended this year’s summit as full participants.The organization aims to foster trade, investment, development, security, and cooperation among leading emerging market economies.

The 2024 summit, themed “Strengthening Multilateralism for Fair Global Development and Security,” marked the 16th annual gathering of the bloc, with a focus on enhancing economic integration with key emerging nations.

Nigeria’s inclusion as a partner country aligns with previous statements in November 2023 by the Minister of Foreign Affairs, Yusuf Tuggar, who expressed the country’s intention to join BRICS as a full member within the next two years, leveraging its large economy and population.

What is in BRICS for Nigeria? What is in BRICS for Africa? The piece below, written by Mthuli Ncube published in https://www.howwemadeitinafrica.com on12 July 2013, spells it out.

Africa And The BRICS: A Win-Win Partnership?

The fifth meeting of the BRICS countries (Brazil, Russia, India, China and South Africa) held in Durban, South Africa, from March 26 to 27, 2013, was seen as an opportunity for Africa to strengthen its ties with these major emerging economies. The theme of the summit was “BRICS and Africa – partnerships for integration and industrialization” with the goal to unlock potential for cooperation between the BRICS and Africa. In fact, Africa has demonstrated huge potential in terms of economic development prospects, abundant natural resources, growing consumer power and favourable demographics. The emergence of the BRICS as major global players has raised hope that a win-win partnership could foster the development of the continent.

In recent years, the BRICS have expanded their involvement in Africa. Their share in foreign direct investment (FDI) inflows and trade volume has surged rapidly. For instance, trade volume between China and Africa increased from US $10 billion in 2000 to US $190 billion in 2012. The partnership between India and Africa, for instance, has significantly promoted the development of small- and medium-scale enterprises on the continent. Meanwhile, Brazil and Russia have been heavily involved in the mining and energy industry in Africa through public-private partnerships.

BRICS engagement with Africa

The BRICS are now Africa’s largest trading partners with trade expected to reach more than US $500 billion by 2015, with 60 per cent from China. The BRICS are also becoming significant investors in Africa, especially in the manufacturing and service sectors. With respect to foreign direct investment, BRICS countries have strengthened their presence on the continent compared with traditional partners, such as the U.S. and Europe. In 2010, for example, the BRICS’ share in FDI inward stock and FDI inflows to Africa reached 14 per cent and 25 per cent, respectively. The share of BRICS countries in the total value of African greenfield projects reached 25 per cent in 2012 compared with 19 per cent in 2003. Trade between the BRICS and Africa rose to as much as US $340 billion in 2012 –10 times higher than the value recorded in 2002 . Currently, the BRICS trade more with Africa than they do among themselves.

Main motivations of the BRICS countries’ engagement in Africa

The reasons behind BRICS countries’ involvement in Africa include their appetite for the continent’s natural resources, Africa’s large and untapped agricultural sector as well as the opportunity for investments and transfer of technology and knowledge targeting the growing middle class which is estimated to include more than 300 million people.

Appetite for natural resources: For many experts, the engagement of the BRICS in Africa is essentially driven by the continent’s abundant natural resources. BRICS are major players in the exploitation of natural resources in many African countries including Angola, Democratic Republic of Congo, Nigeria and Sudan. Brazil and China are the most active in exploring and exploiting gas, oil and minerals resources in Africa. The presence of these major global players in the natural resources sector has brought large investments in various infrastructure projects in recent years to the continent. However, natural resources do not represent the main BRICS investment in Africa. According to the United Nations Conference on Trade and Development (UNCTAD), 75 per cent of the value of BRICS FDI projects in Africa between 2003 and 2012 are in manufacturing and services. Only 10 per cent and 26 per cent of the number and the value of projects, respectively, are in the natural resources and agricultural sectors.  

Africa’s agricultural sector: The agricultural sector is vital for African economies and it is hoped that it will continue to be an engine of economic growth for the continent. The engagement of BRICS countries in the African agricultural sector is motivated by the fact that these countries would need to promote their experiences in terms of agricultural development as a way to unlock the continent’s potential. Brazil, which is a leading global player in trading agricultural commodities, can be a model for African countries regarding agricultural development and can assist Africa in enhancing agricultural productivity and reducing the impact of food insecurity. The success of the Brazilian agricultural model is mainly due to the vertical integration of the sector, the strong support of the state and high levels of mechanization. Fostering agriculture in Africa will be a major development tool to eradicate poverty and hunger over the long term. In that context, sharing the experience of the BRICS would boost Africa’s agricultural productivity.

Seeking diversification and new markets: Besides the huge potential offered by the African primary sector, the BRICS are attracted by the benefits of diversification of African economies as well as the possibility to enter into a large untapped market of one billion African consumers. Over the years, the BRICS countries have accumulated large amounts of reserves which have been invested mainly in the developed world. The persistence of the global financial crisis, which has hit developed countries particularly hard, is motivating the BRICS to shift a portion of their investments toward other emerging destinations in order to maximize returns while reducing risks. Hence, Africa may offer BRICS the opportunity to diversify towards new frontier markets. Moreover, investing in Africa implies access to a one billion consumer market with its growing middle class. In recent years, sectors such as telecommunications, financial services and retail have recorded high rates of growth in most African countries due to high demand by Africa’s middle class.

Implications for Africa

The strategic interest of the BRICS in Africa will strengthen the position of South Africa as a leading regional power and a gateway for other BRICS countries to the African market. As the BRICS are consolidating their positions in Africa through massive investments, this seems to create a new source of development funding for the continent.

South Africa as an influential regional power: South Africa joined the BRICS in 2010 after receiving an official invitation from the group. South Africa is by far the smallest BRICS country in both economic and demographic terms. South Africa’s GDP is less than a quarter of Russia’s, the smallest of the four BRIC countries (Brazil, Russia, India and China). Also, the population of South Africa which is only 50 million is far below Russia’s 140 million and Brazil’s 190 million. As South Africa accounts for one third of Sub-Saharan African economy, it constitutes an entry point for the BRICs to access Africa’s one billion consumer market. Inviting South Africa to join the BRICs was a signal by most important emerging economies that South Africa is an influential regional power and gateway to Africa, which could also defend the interests of the entire continent.

New funding model and regional integration: BRICS countries can enhance the way African countries are financing their infrastructure. In fact, financing is usually available for projects in single countries rather than for those shared by a number of countries, such as intra-regional infrastructure. This model of investment does not help regional integration of African countries. During their last summit in Durban, the BRICS highlighted the need to establish a new funding model that promotes multi-country projects which, in turn, would accelerate the pace of regional integration. In order to enhance their global role in funding investments and to foster South-South partnerships, BRICS countries announced their intention to launch their own development bank, the ‘New Development Bank’. According to the BRICS leaders, this bank would play an important role in boosting the group’s investments in Africa. This initiative may benefit to Africa as it will assist the continent to meet its enormous needs in terms of infrastructure.

Mthuli Ncube  is the Finance Minister in the Zimbabwe cabinet appointed by president Emmerson Mnangagwa and past chief economist and Vice President of the African Development Bank. He holds a PhD in Mathematical Finance from Cambridge University.

Related Articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Stay Connected

0FansLike
0FollowersFollow
0SubscribersSubscribe
- Advertisement -spot_img

Latest Articles