BRICS is an acronym coined by Goldman Sachs economists in 2001, in reference to a political and economic bloc formed by Brazil, Russia, India, China and South Africa to challenge the dominance of Western-led global governance structures.
The bloc has been appealing for African inclusion, on the premise that it will grow their economies.
Below, we explore why these proposals are causing excitement in the continent.
1 . Alternative to the West’s dominance
African nations that are opting to join BRICS view the bloc as an alternative to the Western-led G-7 and G-20, dominated by the US and EU for ignoring or marginalising their voices and opinions on common issues like climate change, development finance, health, trade and security.
2 . Monetary reforms
BRICS’s agenda is to push for the use of local currency in international trade in order to reduce dependence on the US dollar and avoid the risk of sanctions and exchange rate fluctuations. The economic and political bloc is also promoting a multipolar world order, where different regions and countries have a voice and influence in global affairs, especially reforming the International Monetary Fund (IMF).
3 . Technology transfer
African countries possess vast natural resources while the BRICS nations have advanced technology and expertise. Collaboration in areas like agriculture, healthcare and telecommunications can help African nations leapfrog development stages. In addition, training programmes and knowledge exchange between BRICS and African nations can enhance local skills and capabilities leading to sustainable development.
4 . Development opportunities
BRICS offers opportunities for development financing, trade, investment and cooperation in infrastructure, energy, health, education and agriculture. They have the New Development Bank (NDB) which is an alternative to the World Bank and IMF to provide access to development financing for member countries without the restrictions associated with the Bretton Woods institutions.
5 . Political undercurrents
Algeria and Nigeria are among the countries that have received invitations to join BRICS but are apprehensive because of political undercurrents. Algeria is an aspiring shareholder. The country supplies gas to the EU and risks sanctions on the commodity, while Nigeria, Africa’s biggest economy has chosen to prioritise multiple domestic crises rather than BRICS accession. Though Nigeria supports BRICS’s call for U.N. security reforms it is also pro-strengthening of Western partnerships.
6 . Contingent reserve arrangement
This is a framework that provides protection to member countries against global liquidity pressures. Along with NDB, it is seen as an example of increasing South-South cooperation. The framework provides a safety net for BRICS countries in case of balance of payment difficulties and also strengthens the BRICS bloc as a whole by providing a mechanism for mutual support in addition to reducing their dependence on IMF and other western-dominated financial institutions.
7 . Trade opportunities
An increase in trade between African nations and BRICS can boost exports of African goods and resources, helping to diversify their dependency on a few markets.
8 . Geopolitical interests
India and Brazil are not keen on more membership into the bloc for fears of diluting their existing influence. India, a major US ally has a long-standing border dispute with China which has often flared into war. It is also eager to check-mate China’s strategic influence in the group, as Beijing maintains close ties with some of the potential new African entrants like Ethiopia and Nigeria. India reckons if unfettered inclusions are allowed, the new entrants could assist China in propagating its agenda of alienating the West.
9 . Multilateral diplomacy
Joining BRICS by African nations can increase cooperation among African countries in economic and financial matters. It can also increase its influence on the global stage by being part of a powerful alliance that challenges the dominant Western-led global governance structures. Joining BRICS can also give African countries a voice in the current currency reform discussion seeking to create a new currency for trade, as it can lead to reforms that benefit their economies.
10. The de-dollarisation gambit
Swapping the dollar for a BRICS currency on the basis of accruing larger benefits might be unconvincing for some African nations, given the stability of the dollar. Deep-dollar-denominated markets allow for predictability, ease of use and lower cross-border transactions. A BRICS currency might however not address all of these challenges, which will be a drawback to many African nations. Understandably, many are hesitant to
