When Brics – the club of Global South nations – was expanded by five countries in 2023, the biggest surprise was the absence of Nigeria on the list of new entrants. Brics+ diplomats are confident this omission is about to be fixed, with Nigeria’s admission to the bloc imminent.
As of January Brics – initially made up of Brazil, Russia, India, China and SA – has become Brics+ after the addition of the United Arab Emirates (UAE), Saudi Arabia, Egypt, Iran and Ethiopia. The inclusion of Nigeria, Africa’s most populous country, will help make the bloc a force to be reckoned with.
However, as it expands legitimate questions are starting to emerge about its potential and, critically, exactly what the bloc stands for.
The potential is obvious. Assuming economic co-operation is the minimum programme, the partners’ economies are complementary. After sanctions from the West triggered by Russia’s invasion of Ukraine in 2022, Russia needs a market for its gas, which is being shunned by the West.
Instead of buying Russia’s gas, some Western countries have resorted to powering their economies through coal-fired power stations. Up to now China, which has a relationship without limits with Russia, has proved an adequate alternative market for Russia’s gas, though it is mostly sold at a huge discount. Iran, also buckling under the weight of Western sanctions, needs a market for its oil.
Nigeria, while not under Western sanctions, also requires two things that have hitherto eluded it - a reliable market for its crude oil, and investments in domestic refining capacity to generate growth and jobs for its population. To date, the only new investment in refining crude has been that by Aliko Dangote, the Nigerian billionaire. More such investments are required.
Even though its economy has shown signs of slowing down, China has been – and continues to be – a major beneficiary from the Brics+ partnership. It has been buying Africa’s commodities to lubricate its industrialisation, yet has consistently enjoyed a trade surplus.
The low level of intra-Brics+ trade is where opportunity lies. The implementation of the African Continental Free Trade Area (AfCFTA) offers the prospects of building up Africa’s manufacturing capacity. Inward investment from Brics+ into Africa’s productive sectors could ensure that Africans produce finished products that they can then trade among each other and with the rest of the Brics+ bloc.
At less than 20%, intra-African trade is woefully low - too low to attract meaningful investment. As well as investing in building Africa’s productive capacity, the continent can benefit from infrastructure investment. Its roads, railways, ports and dams require trillions of rand in investment to create a credible platform for intra-African trade.
Through its Belt and Road Initiative (BRI), a 10-year infrastructure investment programme across three continents, China has already acted on this opportunity. But the real potential for growth lies beyond merely getting goods in and out of China, but also in harnessing trade routes across continents.
The momentum of the BRI programme has slowed significantly in recent years, in part because of the Covid-19 pandemic. Growing debt – some African countries have failed to service their loans – has seen the West and the Bretton Woods institutions questioning China’s intentions in Africa. Still, as a proportion of all debt, African countries’ debt to China – both governments and their entities – is relatively low.
Celebrations of the BRI’s 10th anniversary in 2023 were rather low-key inside and outside China. Yet the BRI strategy still has merit, especially within a wider Brics+ context. Enter cash-flush Saudi Arabia and UAE, which yearn for global recognition. Brics+ has offered them a huge bump in this respect.
Saudi Arabia has been spending billions getting sports, film and musical stars to host global tournaments in the kingdom. This investment is beginning to pay off. Its football league is one of the most profitable ones in the world.
Beyond infrastructure and industrial investment, the Brics+ partnership can be enhanced through a free trade area. Otherwise, intra-Brics+ trade will continue to be low and unbalanced.
The New Development Bank (Brics Bank) stands to benefit from the expansion of its shareholder base with the new entrants. The bank, in Shanghai, has been one of the bloc’s major success stories. Its establishment was quick, as was its response in the Covid-19 pandemic. Its credit rating is the envy of many development finance institutions.
Since its formation Brics, and now Brics+, has been seen - rather unfairly, I believe - as an anti-West bloc sustained by anti-West rhetoric. This notion has been sustained by frequent talk of dedollarisation. This has grown in the wake of Russia's invasion of Ukraine, especially the Kremlin’s search for alternative payment systems after it was kicked out of the Swift international payment system.
The bloc's founders are to blame for this. They have done little to dispel this anti-West narrative. They have done even less in explaining the rationale for wanting a multipolar world. Expanding the scope of co-operation has also been slow. Three areas are glaringly obvious - foreign policy, military co-operation, and the treatment of political opponents.
The bloc has no common position on three conflicts raging in the world now – the Gaza bombardment, the Russia-Ukraine war, and the Red Sea crisis. Co-operation in foreign policy is ad hoc. This despite Saudi Arabia’s emerging position as an honest broker in conflicts such as Sudan and Gaza. Joint military exercises happen despite, not because of, Brics+ membership.
Russia’s recent elections, won as expected by President Vladimir Putin, are a reminder of the lack of common values among the Brics+ partners. Most of Putin’s opponents were disqualified before the polls and one, Alexei Navalny, died mysteriously in jail in February.
A further expansion of the bloc without shared values will limit Brics+ to a forum for anti-West rants, and undermine its potential as a force for the Global South’s good.
• Dludlu, a former editor of The Sowetan, is CEO of the Small Business Institute.
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