The dawn of a new era in the global political and economic landscape is upon us. As the BRICS bloc extends its arms to welcome Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the UAE into its fold in 2024, the implications reverberate far beyond the immediate participants. This expansion holds the potential to reshape the dynamics of trade and economic cooperation not only among its members but also across continents. For Africa, particularly, this evolving landscape underscores the urgency of embracing initiatives like the African Continental Free Trade Area (AfCFTA) and fostering intra-African trade to keep pace with the evolving global systems.
BRICS Expansion: A Paradigm Shift
The BRICS grouping, originally comprising Brazil, Russia, India, China, and South Africa, emerged in 2009 as a coalition of rapidly developing economies advocating for greater representation of the Global South on the global stage. As Argentina et al join this constellation of economic powerhouses, it marks a momentous expansion that holds the promise of reshaping international trade dynamics.
Potential influence on Intra-African Trade
Undoubtedly, the broadened BRICS bloc will bring together a consortium of mineral resource-rich countries and major oil producers, accompanied by some of the world’s fastest-growing energy consumers. This synergy highlights the potential for profound changes in energy investment and trade patterns. In the wake of geopolitical events, such as the conflict in Ukraine, European energy systems are grappling with the imperative to establish newer and more secure ties in order to maintain energy stability. This strategic pivot towards Africa for energy partnerships underscores the transformative changes that are sweeping the world. As Europe seeks to diversify its energy sources and secure more reliable suppliers, African nations find themselves increasingly in the spotlight, with the potential to play a pivotal role in ensuring energy security and stability.
Read Also:
For Africa, the expanding BRICS bloc signifies a complex interplay of challenges and opportunities that could reshape the dynamics of intra-African trade and cooperation. On one hand, the alliance’s emphasis on energy resources could lead to intensified competition for access to Africa’s abundant mineral and energy reserves. This competition, while potentially driving up demand and investment, may also present challenges in terms of sustainable resource management, environmental stewardship, and equitable distribution of benefits.
On the other hand, the collaboration and partnerships that arise from the expanding BRICS bloc could usher in a new era of economic cooperation for African nations, which will lead to the development and strengthening of supply-chains in Africa. The potential for increased investment in energy infrastructure, technological innovation, and industrial development could also catalyse growth and create employment opportunities across the continent. The growth of these strategic partnerships could catalyse intra-African trade by redefining the flow of goods, encouraging diversification, and unlocking previously untapped markets.
It is imperative for African leaders and policymakers to carefully navigate these dynamics. Maximising the potential benefits from these partnerships while mitigating potential challenges requires strategic planning, robust policies, and cross-border collaboration.
Opportunities for Africa’s Supply-Chain/Trade Development
The BRICS expansion offers African countries the impetus to revisit their trade allegiances, policies and strategies. The redefined BRICS bloc, encompassing an array of resource-rich and economically dynamic nations, creates a ripple effect that could reverberate across African supply chains. The non-BRICS member African States and the BRICs bloc have potential to gain from each other. The expanded BRICS bloc, armed with its economic prowess and trading networks, could stimulate infrastructure investments across Africa. Improved road, rail, and port connectivity could transform cross-border trade and enable more efficient supply-chain management. However, to realise these benefits, careful negotiation and strategic planning are essential.
Improved connectivity between the BRICS bloc and African nations can lead to smoother trade flows, reduced transportation costs, and better infrastructure for intra-African trade. The expanded BRICS bloc could potentially collaborate with African countries to establish more efficient and robust supply-chains that lead to increased value addition. The collaboration between African nations and the BRICS bloc could stimulate local value addition and industrialisation, which, in turn, could foster the development of regional supply chains, where raw materials are transformed into intermediate or finished goods within the continent. Such value-added production can boost job creation and enhance economic resilience. African nations and the new BRICS countries would need to negotiate agreements to streamline cross-border trade, reduce tariff and non-tariff barriers, and harmonise standards. Negotiations should focus on creating a conducive environment for the seamless movement of goods across borders.
Promoting AfCFTA for a Resilient Africa
As the global political and economic paradigms shift, Africa stands at a crossroads. The AfCFTA, as a landmark initiative, empowers African countries to harness their potential for sustainable growth and development.
- Harmonisation of Standards:
The expanded BRICS grouping could incentivise the harmonisation of standards, regulations, and certification processes among African nations. This alignment would simplify cross-border trade and reduce the complexities associated with varying compliance requirements.
- Market Diversification:
The infusion of new trading partners from the expanded BRICS bloc could facilitate diversification of African economies’ export destinations. This diversification mitigates the risks associated with overreliance on a limited number of trading partners and contributes to increased market resilience.
- Trade Facilitation:
Collaboration with the BRICS countries could encourage the implementation of trade facilitation measures, such as streamlined customs procedures and efficient trade corridors. These measures would enable the movement of goods and services across borders more swiftly, reducing costs and increasing trade volumes. Negotiations should revolve around creating favourable trade agreements that incentivise tariff reduction, trade facilitation measures, and mutual recognition of certifications. These agreements should prioritise the elimination of barriers that hinder the movement of goods and services. The BRICS alliance could provide an impetus for African nations to deepen regional economic integration efforts.
The global political and economic landscape is evolving, and Africa is presented with a unique opportunity to position itself as a key player. The BRICS expansion underlines the significance of initiatives like the AfCFTA in reshaping Africa’s economic future. As the winds of change sweep across the world, Africa has the chance to harness its potential and forge a prosperous path forward.
About the author
*Tami Koroye is a PhD Candidate at the University of Bradford, and a free trade fellow at Ominira Initiative.
Leave a Reply