Brazil, Russia, India, China, and South Africa, known simply as BRICS, are a group of five fast-developing economies that analysts believe will be most dominant in the next thirty years. Originally coined by economists at Goldman Sachs, this prominent group of countries first included just four countries (BRIC), but ultimately South Africa was included in these top ranks.
Today, BRICS is a powerful geopolitical and economic group known around the globe. Spanning four continents and representing over one third of the world’s population, BRICS members are known for their significant influence on regional affairs––all are members of the G20, which includes other countries like the United States, United Kingdom, Japan, Australia, Mexico, and the European Union. In addition, leaders from BRICS regularly meet to share opportunities and discuss policies and actions that benefit one another.
South Africa’s Growing Influence in the Global Arena
Since being recognized as an emerging economy and joining BRICS in 2010, South Africa has gained a greater influence and exponentially more trade opportunities in the global market to boost its own economy. While this has been a huge benefit to South Africa’s economy, BRICS has been great for the entire African continent.
How we made it in Africa says, “With South Africa as a permanent member, Africa is not left out of major decisions made by other developing nations. Africa therefore has the opportunity to contribute to the decision-making process, and reap the benefits from the economic cooperation among the BRICS nations.”
South African Ties to the BRICS Development Bank
As a member of BRICS, South Africa has access to the New Development Bank (NDB), which is the “brainchild” of BRICS countries. Created after the 2008 financial crisis, the NDB “seeks to set itself as an alternative development funder to compete with traditional multi-laterals like the IMF and World Bank.” With access to the NDB, African countries now have an alternative source for major project financing, which has been and will continue to be a huge asset for the region.
Today, the NDB is based in Shanghai, but has regional branches in BRICS countries, such as the Africa Regional Centre in South Africa. In 2017, the local arm of the NDB approved loans worth $1.5 billion to fund infrastructure-related projects in South Africa. By 2021, the NDB is targeted to dispense up to $15 billion to fund relevant projects. South Africa is represented on the bank’s Board of Governors and Board of Directors.
South Africa Increases Trade With China
When South Africa joined BRICS, the Chinese Foreign Ministry spokesperson said, “We believe that South Africa’s accession will promote the development of BRICS and enhance cooperation between emerging economies.”
Since then, China has become South Africa’s largest trading partner. According to the International Trade Centre, China-Africa trade from 2006 to 2016 increased by around 260% to a total of $144.6 billion. More African countries are taking advantage of South Africa’s close ties to China and making trade agreements of their own. Egypt and Kenya are China’s third and seventh-largest African trade partners, respectively.
South Africa Continues to Make a Name for Itself
South African President Cyril Ramaphosa says his country is entering “a new era.”. With the second highest GDP in all of Africa and a luxury real estate market with growth that is outpacing most of the world, South Africa is one of five developing economies to keep an eye on.
In 2018 after the resignation of South Africa’s President, Jacob Zuma, “international investors upgraded South Africa’s prospects, sending the nation’s currency, the rand, to a three-year high, while bidding up shares of South African companies.”
As a permanent member of BRICS with a heightening global influence and growing trade opportunities, South Africa is attracting the attention of sophisticated investors worldwide who seek high-quality alternative investments for their portfolio.
Subscribe for exclusive insight into South Africa’s emerging economy.
