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Tuesday, 25 October 2016 00:00

The BRICS Goa Summit: What is in it for Africa?

JOHANNESBURG, South Africa, October 25, 2016 (BRICS) -- The eighth BRICS (Brazil, Russia, India, China, South Africa) summit concluded on 16 October, 2016, in Goa, India. Although the BRICS nations are facing economic and political headwinds, they are still seen as constituting new global forces – individually and collectively. Their global strength lies in the fact that they constitute over 40 percent of the world’s economy and a similar population count. BRICS annual summits have become major geopolitical events during which dominant powers of the so-called global north are challenged.

What does the BRICS portend for Africa? Few doubt the fact that the economies of Africa and those of the BRICS have increasingly integrated over the past decade. The United Nations Economic Commission for Africa (UNECA) for instance observed that trade with the BRICS had grown faster than with any other region of the World, doubling to $340 billion in 2012 and was projected to reach $500 billion by 2015.”  While pessimists have dismissed the BRICS’ as a new source of dependency for African countries in similar fashion to Africa’s dependency on its traditional partners of North America and Europe, enthusiasts believe that the grouping bodes well for the continent because it offers an alternative economic partnership.

Probably the foremost consideration in the African dimension of the BRICS is the inclusion of South Africa in the formation. South Africa is seen as representing not just itself but the rest of the continent. Indeed, the term “BRIC nations” was coined in 2001 by former Goldman Sachs economist Jim O’Neill as the BRICs denoting nations with large populations ramping up robust economic growth. South Africa was invited to join in 2010 thus making up the “BRICS.”  O’Neill himself has stated that South Africa does not strictly belong to the BRICS giving rise to the conclusion that South Africa’s inclusion is based on a south-south imperative as opposed to the size of its economy. According to the 2015 World Bank data, South Africa’s GDP was $312.8 billion, way lower than the rest: China ($10.866 trillion), India ($2.074), Brazil ($1.775 trillion) and Russia ($1.326). There are questions galore as to whether South Africa represents African interests or uses its position to further its own global foreign policy objectives.

Despite initial misgivings about a group that started only as an asset managers’ acronym, the BRICS has made great strides towards institutionalisation. A major milestone was achieved in March this year when the New Development Bank (NDB), the Shanghai-based BRICS bank opened shop. It is understood that South Africa lobbied hard for the location of the NDB headquarters on its soil. In the end, South Africa had to settle for hosting the bank’s Africa Regional Centre (ARC) of the NDB.

For Africa, the NDB signifies the possibility of diversifying sources of development finance away from the West-dominated World Bank and IMF. It is still early to asses NDB’s potential as an alternative to the Bretton Woods institutions. However, despite optimism that the NDB would offer financing to African countries, the initial loans have in fact gone to member states. Even if South Africa wanted to play a larger role for itself and the rest Africa, it is hamstrung by the fact that its contribution to the bank’s coffers is the least at $5 billion, while China is the biggest contributor at $41 billion followed by Brazil, Russia and India at $18 billion apiece. The voting within rights the NDB is based on each country’s stake, a fact critiqued as replicating the World Bank/IMF mechanisms.

An agreement was reached for a BRICS multilateral infrastructure co-financing for Africa at the Durban summit in 2013. Indeed, one of the bright spots yet for Africa was the designation of the Durban summit as “BRICS and Africa: Partnership for Development, Integration and Industrialization” with a special African-BRICS leaders forum held. However, it would appear that the continent will remain on the sidelines of investment plans or receive a token support only for the foreseeable future. This is particularly because all the BRICS countries with the exception of India have seen a sharp drop in their GDP growth rates in recent times. This implies that priority will be placed on propping up the flagging economies of a Russia suffering Western sanctions, a China experiencing a deep dip in economic growth rate and a Brazil battered by a recession and internal political challenges. Even though the Indian economy is growing at above 7 percent GDP growth rate, Indian leaders themselves acknowledge that their country trails all the other four BRICS member states in terms of quality of life of its citizens.

One of the positive declarations coming out of the GOA summit is the BRICS affirmation of Africa’s developmental and geopolitical interests. These include the endorsement of the continent’s long-term development blueprint, the Agenda 2063 as well as the continent’s long sought after permanent seat in the United Nations Security. It would however seem that the BRICS is the unlikely site for the five countries’ engagement with Africa in the implementation of the Agenda 2063. Each of the five countries has a mechanism for engagement with the continent, most significantly, the China-led Forum on China Africa Cooperation (FOCAC) and the India-Africa Summit (IAS). Talk of BRICS multilateral or bilateral engagement with Africa thus comes across as symbolic conflation of the plans already under implementation. Broadly speaking, the seeming proximity between the five countries belies a number of differences over global and African issues. An overarching example suffices here. The strong entry of China into Africa is seen to have triggered particularly South Africa and India into fashioning their own Africa-wide strategies. As such, the rhetoric of the BRICS supporting the African agenda as happened in Goa this week stands counter to their competition for the economic and political resources that Africa portends.

With regards to the BRICS’ support for the Africa’s veto power position in the UNSC, one has to consider the complexity of the issue. Although Russia and China pledged to support the African campaign, other global powers are keenly intent on the position. Brazil, Germany, India, Japan and Africa (read South Africa, Nigeria and Egypt) all have sites trained on the all-important seat. For instance, Russia would be opposed to Germany’s entry, while China would be opposed to Japan’s co-option. African countries themselves are not in agreement on which nations should take the seat. Throw into the mix the asymmetrical veto voting power wielded by the current UNSC permanent members – China, France, Russia, UK, USA – and the improbability of the BRICS doing Africa’s bidding beyond statements of intent becomes clear.

In the final analysis, the BRICS formation is good for Africa to the extent that it symbolises a new geography of engagement vis-à-vis the West. This should however not distract African analysts from understanding that their interests in the grouping are secondary to the core interests of the BRICS. For tangible engagements one has to look at the direct relations of Brazil, Russia, India, China and South Africa with individual African countries and the continent as a whole.

Dr. Bob Wekesa
Post-Doctoral Fellow, University of the Witwatersrand, Johannesburg, South Africa



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