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BRICS expansion: What’s in it for Africa?

Following the Johannesburg summit, the continent will become a major focus for the organization
South African President Cyril Ramaphosa speaks during the Brics Business Summit on August 22, 2023 in Johannesburg, South Africa. © Per-Anders Pettersson / Getty Images

South African President Cyril Ramaphosa speaks during the Brics Business Summit on August 22, 2023 in Johannesburg, South Africa. © Per-Anders Pettersson / Getty Images

By Andrey Maslov, Director of the Centre for African Studies, HSE University, and Daria Sukhova, Research intern of the Centre for African Studies, HSE University

Traditionally, BRICS policy makers turn their attention to African issues every five years, when the summit is held in South Africa. Last month’s gathering was no exception, and compared to the previous years, was even grander in scale. For the first time ever, invitations were sent out to all the leaders of the continent, and almost everyone responded. The event in Johannesburg was attended by the leaders of 19 African countries, ten were represented by vice-presidents and prime ministers, and ten others by ministers of foreign affairs, ministers of economy, and ministers of finance.

The summit became a turning point for the BRICS, given it was most likely the last meeting of the association’s five founders in the traditional format. On January 1, 2024, six more states will join as full members: the UAE, Saudi Arabia, Egypt, Ethiopia, Argentina, and Iran.

As a result, the world’s fastest-growing continent, Africa, will be represented in BRICS not just by one, but by three countries. The invitation to Egypt – and particularly Ethiopia –came as a surprise to most observers, but we may confidently assert that the development of Africa and the work of BRICS on the continent will become an essential and permanent part of the grouping’s agenda. 

In this regard, Russia has a particular responsibility as the host of the next summit, which will be held in Kazan in the summer of 2024.


Africa for BRICS and BRICS for Africa

The expansion of BRICS into Ethiopia and Egypt means that the summits will be held in Africa more often, and the organization’s activities will expand on the continent.

Several initiatives in the fields of logistics, energy, and finance have already been announced under the auspices of BRICS. All of them are different in scale and have varied in terms of success. Many affect the interests of Africa, but so far, no project has been implemented outside of South Africa. The BRICS New Development Bank (NDB) could play an important role in financing these schemes. The physical presence of BRICS in Africa is currently limited to the NDB’s Africa Regional Centre, but it too finances projects only in South Africa.

Since 2016, the NDB has supported 14 projects in South Africa aimed at developing transport infrastructure, water supply systems, and the energy sector, as well as projects dealing with environmental protection and recovery from COVID-19. The only one outside its territory – the Lesotho Highlands Water Project, Phase II – also concerns South Africa, since it deals with supplying it with water. Most programs are implemented through the provision of loans that cover the entire cost or up to half of the cost of the project. Some projects also attract funding from the World Bank and the African Development Bank.

Obviously, the activities of the National Development Bank require geographical diversification and more consistent profiling.

The parties agreed that specific criteria for obtaining the status of a “BRICS partner country” will be developed by the next summit. Many African countries may be interested in obtaining this status if it comes with practical advantages such as access to financing, assistance in the field of food security, the digitalization of public administration, the BRICS energy platform, and others. In other words, the status of a “BRICS partner country” will allow projects to be implemented under the auspices of the organization. Each state concerned will receive new development opportunities and will commit to ensuring the necessary conditions for implementing such projects.


Who was invited

According to South African Minister of Foreign Affairs Naledi Pandor, 23 countrieshave applied to join, including the following African states: Egypt, Ethiopia, Senegal, Nigeria, Algeria, and Morocco. However, the Moroccan Foreign Ministry denied South Africa’s statement and Rabat’s officials did not take part in the events of the summit. One of the reasons for this was the presence of representatives from Western Sahara – a disputed territory.

Ethiopia and Egypt, as well as South Africa, are long-standing and reliable partners of Moscow. However, these countries have difficult relations with each other. This primarily concerns the long-standing conflict over the GERD dam, which Ethiopia is building on its section of the Nile and which Egypt considers a threat to its water supply. The BRICS platform may allow both to negotiate on an international level without interference from the West. It will also help the countries find common ground in the field of economics without escalating the political side of the issue. Meanwhile, for BRICS this will be a good opportunity to work out mechanisms for establishing economic ties between the participants even as they face various disagreements. 

By the start of the summit, Egypt had already become a shareholder of the BRICS New Development Bank, even as the country remains one of the most heavily indebted on the African continent. Cairo’s volume of external debt amounts to $163 billion, and the Egyptian pound is steadily depreciating. Because of this, using alternative currencies for trade and especially imports is a priority for the country. Russia is the most important supplier of grain to Egypt. Converting trade into rubles, yuan, pounds, and now UAE dirhams will be an important task in the coming years.

Within BRICS, Ethiopia will represent the African continent in a no less major way than South Africa. Ethiopia is a founding country of the Organization of African Unity (OAU) and home to the headquarters of the African Union. Moreover, Addis Ababa is widely considered the diplomatic capital of Africa. However, just like in the case of Egypt, the problem of external debt ($28 billion, with a significant part owed to China) has significantly impeded the country’s development in recent years. Ethiopia’s debt restructuring process has now started and new BRICS partners, such as the UAE, will be able to participate in this process not only on a bilateral basis, but also by means of the NDB and other institutions which will be created in the future. 

The Algerian government has also applied to join BRICS and become a shareholder of the NDB, offering an initial contribution of $ 1.5 billion. In July of this year, Algerian President Abdelmadjid Tebboune visited Russia and China, and the Algerian side “informed, again, the Chinese side of the steps it has taken to apply for Algeria's membership of the BRICS” and China “welcomed Algeria’s positive willingness to join this group and affirmed supporting its efforts to achieve this objective.” However, Algeria did not receive an invitation.

If a change in government sees Argentina withdraw its candidacy, Russia could theoretically resume negotiations with others. Algeria – a long-standing and loyal friend –  could become an ideal representative of the Francophone world in BRICS, as long as the window of opportunity remains open. This may be possible since the document defining the participation criteria and the procedure for accepting new members has not yet been publicly disclosed. 


Russia for BRICS and BRICS for Russia

An important part of the preparations for the BRICS summit in South Africa were negotiations held at the Russia-Africa Summit in St. Petersburg, which took place in July. The goal to promote a deeper BRICS-Africa partnership, for example, was sealed there. Russia, which will host the 2024 BRICS event, intends to promote the expansion of economic cooperation tools and to establish a structure for relations between members, as well as with Africa.

For Moscow, it is particularly important that de-dollarization has become a systemically important BRICS initiative – and not only in matters of trade, but also investment, banking, and international reserves.  BRICS countries are already doing a lot in this respect, including accumulating physical gold reserves and reserves in each other's currencies, and connecting to systems for the transfer of financial messages. However, there is still a lot to be done.

According to the summit’s final declaration, finance ministers and the directors of central banks were given the task of optimizing trade in national currencies, and the like, which should strengthen the role of BRICS financial institutions. This will help African countries overcome dependence on Western-dominated internationallenders – the successors of the Bretton Woods system – and will provide tools for dealing with energy poverty and ensuring food security.

The need to create sustainable food supply chains was also stated. This vital both for Africa and for exporters, represented within BRICS primarily by Russia.

The expansion in Africa largely depends on Moscow. The NDB has refused to finance projects in Russia due to sanctions. This means that those funds may now be sent to Africa – especially since Egypt has become one of the bank’s shareholders, and Ethiopia will likely have a similar opportunity soon. However, first of all, the interests and recommendations of Russia as a shareholder must be taken into account. 

Today, Russia's priorities within BRICS are concrete projects such as the International North–South Transport Corridor and the general development of logistics and other transport corridors. There are also plans to create a trust fund to support BRICS research infrastructure.

Author: Editors Desk

Source: RT

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