The new members which joined the BRICS are Argentina, Saudi Arabia, the United Arab Emirates (UAE), Egypt, Iran and Ethiopia.
The addition of the six members makes BRICS to a group with a population of 3.67 billion, which accounts for around 47 percent of the world’s total population, and a total GDP of 29 trillion US dollars, which accounts for approximately 29 percent of the global GDP.
Along with the increase in member countries, the Summit was concluded with positive results, including encouraging the use of local currencies for trade among members and other developing countries.
The expansion of BRICS has raised new hopes for stronger commercial cooperation with mutual benefit that will promote the development of Africa. This hope is based on the fact that BRICS countries oppose the Cold War mentality and unilateralism.
For that reason, they are committed to promoting multilateral cooperation, mutual respect, mutual trust and cooperation in strengthening an alternative international developmental path that is inclusive.
Unlike some countries that try to divide the world into exclusive blocs and expand their military alliance to maintain their rule, BRICS countries focus on maintaining world peace and promoting common development.
Considering the increasing of economic and political power of BRICS and its cooperation with Africa, the African countries have become more interested in BRICS than before because it offers new opportunities for trade, investment and technology transfer, which will help promote the development and integration of the African continent.
In recent years, the BRICS countries, especially China, have expanded their economic cooperation with Africa. Currently, China is Africa’s largest trading partner and has granted greater market access to African products. For example, in 2022, nearly 15 percent of Africa’s exports went to China, compared to 3.8 percent in 2001.
According to official statistics, the trade value between China and Africa reached a new high of 282 billion US dollars in 2022, which increased 10.9 percent year on year. China has also invested massively in infrastructure and industrial projects in African nations.
In addition to China, India has also increased its trade and investment cooperation with Africa, especially in the fields of agriculture, health care, renewable energy, water supply infrastructure, education and information technology, and established a fund of 10 billion US dollars to support development projects in Africa.
According to the statistics of the Ministry of Commerce and Industry of India, in the financial year 2022/23, the trade between India and Africa grew by 9.26 percent to almost 100 billion US dollars, from 7 billion US dollars in 2001.
Economic research data for the year 2022 from the African Development Bank (AfDB) shows that BRICS is now Africa’s largest trading partner with their trade expected to exceed 500 billion US dollars by 2030.
It is clear that BRICS countries have made greater contributions to Africa’s economic development than G7 members.
It is important to note that African countries have realized that depending on Western countries makes them vulnerable, especially when their interests collide. The fact that they have to sell their oil and other resources to Western countries at a fixed price, trade in US dollars and use the West-dominated financial system are just some of the disadvantages in dealing with Western economies.
Due to the new financial strategy of BRICS and its action to encourage the use of local currencies in trade, African countries now should use this opportunity to fight for their full economic independence. They need to take decisive actions to reduce their economic dependence on US dollar and Western financial institutions, especially private creditors.
This freedom includes recognizing economic emancipation, freedom to do business based on equality, and manage their internal affairs independently, without being subject to Western countries’ interference.
The new financial system of BRICS, BRICS PAY, provides an opportunity for member countries and other developing countries to receive and make payments in local currencies. And there is a need for African countries to join this system to reduce the risk of economic instability due to unilateral sanctions imposed by Western nations.
In order to benefit from the BRICS PAY system, African countries need to increase trade with BRICS countries and use their strength and resources for mutual benefit. This can be done if African countries adopt a strategic approach in cooperation with BRICS based on the assessment of their respective strengths and weaknesses and the pursuit of mutual benefit.
To that end, African countries need to strengthen their internal institutions and policies, strengthen regional cooperation and carry out cooperation with BRICS nations in a bold but prudent way based on a shared vision of common prosperity.
In addition, African countries need to take advantage of the opportunities offered by BRICS by prioritizing investment in education, technology and infrastructure, and promoting innovation, regional integration and sustainable development.
Above all, African countries should attract more investments and increase trade volumes with BRICS countries and other developing nations. In doing so, they will realize their full potential and contribute to the shaping of a global economic order that is more equitable and inclusive.
It is worth noting that, since and before independence, African countries have had to live with Western financial systems and strict conditions attached to their economic and financial aid. This is because there was no alternative financial system or other institutions which can replace the Western ones. Therefore, they had to use the SWIFT system and comply with the wishes of those countries.
For that reason and in order to break free from its over-dependence on the monopolistic SWIFT system and the aid provided by Western financial institutions, African countries may find it beneficial to join the BRICS PAY and strengthen trade cooperation with BRICS countries. Moreover, it’s advisable for them to start doing business using their own currencies so as to lessen the risk of insufficient capability to service foreign debt and to purchase foreign goods and services.
As countries increasingly realize the importance and benefits of doing business in local currencies, we expect to witness the emergence of a decentralized and more complex international financial system, in which BRICS countries, especially China, play an increasingly important role.
(The writer is a Dar es Salaam-based analyst on international politics and foreign relations. Email: [email protected])