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BRICS more preferable as partner for Africa.

Summary: As Africa's traditional development partners, the US and Western countries continue to look more inwards and cut their aid to the continent, the BRICS grouping is emerging as a more desirable and effective partner.

The association of Brazil, Russia, India, China and South Africa (BRICS) has been fairly understated but it is nevertheless emerging as a powerful new force in global investment and finance.

Its 10th annual summit last year was of particular interest to Africa. It was held in Johannesburg and the theme was BRICS in Africa: Collaboration for inclusive growth and shared prosperity in the fourth industrial revolution.

After decades of US and European Union (EU) domination of global political and economic architecture, the balance of power is shifting and being counterbalanced with the rise of China and other emerging economies such as Russia, India and Brazil, which are members of BRICS.

The acronym 'BRIC' was coined in 2001 to refer to a group of four countries: Brazil, India, Russia and China. These four emerging economies started to meet regularly as a group in 2006. In 2010 South Africa was invited to join, bringing the total membership of the now-renamed 'BRICS' to five countries.

The Delhi Declaration, passed at the 4th BRICS summit in March, 2012, clearly sums up BRICS objectives as follows: "We envision a future marked by global peace, economic and social progress and enlightened scientific temper. We stand ready to work with others, developed and developing countries together, on the basis of universally recognised norms of international law and multilateral decision making, to deal with the challenges and opportunities before the world today."

According to World Trade Organisation (WTO) statistics, BRICS countries account for 30% of the world's land, 43% of its population, 21% of its GDP and 45% of agricultural production. As the grip of the US and EU countries is waning in the globalised village, emerging economic blocs like BRICS have gained momentum and are spreading their influence in developing regions.

Africa, given its diversity, strategic geographical position, abundant natural resources, a young labour force and a growing middle class, is flexing its muscles and can no longer be considered as a docile player on the global economic stage.

Africa is now placing conditions on the extraction of its natural resources and leveraging on them to advance its own political interests and economic development aspirations as envisioned in African Union (AU) Agenda 2063. Robust economic integration initiatives such as the Continental Free Trade Area (CFTA) will add to Africa's bargaining position from a regional perspective.

Africa is rising and making informed and smart choices on who it wants to do business with and under what conditions. African countries view BRICS as a development partner rather than as a threat to their independence and national sovereignty. BRICS offers African countries an alternative -- an equal partnership in economic cooperation and development and less reliance on the US and EU countries.

An alternative option

Western countries are generally viewed by Africans as having double standards and often tend to use development finance, aid and technical assistance to serve their political and economic interests.

The Western development aid approach in Africa is now considered outdated and based on perpetuating the colonial and imperialistic donor/subservient- recipient legacy. BRICS offers a new way of doing business, involving a partnership and a win-win deal with Africa.

According to the EU's 2012 parliamentary report, The Role of BRICS in the Developing World, BRICS member states are catalysing changes in the architecture of international development cooperation, not only with regard to trade and financial flows, but also as donors.

Over the last decade BRICS increased financial and technical assistance and economic cooperation with developing countries through the South-South cooperation initiative.

Although BRICS' development aid to Africa is lower in comparison to Organisation for Economic Co-operation and Development (OECD) Development Assistance Committee (DAC) countries, often referred to as the major donor countries, it is nevertheless increasing.

Lack of structured data often makes the tracking and quantification of BRICS development aid difficult to measure. The EU Parliamentary report cited above, shows that worldwide FDI inflows from BRICS increased from less than $10bn in 2002 to a whopping $146bn six years later in 2008. In 2016, FDI inflows from BRICS to recipient countries were estimated at $481bn.

The BRICS New Development Bank (NDB), launched in 2014 in Brazil at the BRICS 6th summit, seeks to mobilise resources for infrastructure and sustainable development projects in BRICS and other developing countries.

NDB offers development aid alternatives to African countries, which have relied mostly on western multilateral lending institutions -- the likes of the IMF and World Bank, controlled from western capitals. Western development aid has often come with strings attached and unfavourable conditions under the guise of promoting democracy, human rights and poverty alleviation.

Over the last decade, BRICS countries, as a bloc and individually, have made significant contributions in strengthening economic cooperation and development ties with African countries.

BRICS' strength is in its policies of multilateralism, partnership, non-interference and recognition of national sovereignty of the countries they dialogue and cooperate with.

BRICS has a different approach to development aid and views African countries as "equal development partners". BRICS aid projects in Africa are negotiated deals and determined by the needs of the recipient countries, as opposed to being imposed.

BRICS-Africa trade on the rise

According to the AfreximBank (Africa) and Exim Bank (India) 2018 report, Developing South-South Collaboration: An Analysis of Africa and India's Trade and Investment, trade between Africa and India is on the rise.

India-Africa trade between 2001 and 2014 increased tenfold, making India Africa's 4th largest trading partner. According to the report, India-Africa bilateral trade over the last 17 years rose as follows: 2001 -- $7.2bn, 2014 -- $78bn and 2017 -- $55bn. Africa accounts for 8% of India's total trade.

Indian Deputy President, Shri Venkaiah Naidu, was in Zimbabwe in November, 2018 on a three- nation tour of Botswana, Zimbabwe and Malawi aimed at deepening India's strategic economic cooperation with Africa.

India and Zimbabwe signed six bilateral agreements in areas which include: mining, information services, health and ICT. India also pledged a $310m line of credit to Zimbabwe for the rehabilitation of infrastructure projects.

Russia has also entered the fray in Africa. In March 2018, Russia's Foreign Minister, Sergey Lavrov, undertook a five-day tour of African countries, namely Angola, Namibia, Mozambique, Zimbabwe and Ethiopia.

This was viewed as marking the return of Russia in Africa as it did not focus much on defence deals but on mining, agriculture, industrial development, energy and other commercial interests.

China remains Africa's leading trading and development partner. China's relations with Africa are multifaceted and have been boosted by the Forum on China-Africa Cooperation (FOCAC) and other platforms such as the One Belt-One Road (OBOR) initiative as well as institutions such as the Export- Import Bank of China (EXIM), China Development Bank and China-Africa Development Fund.

China's policy on Africa has caused unease for the US. US President Donald Trump has shown disdain and disrespect for African countries, exhibited by his previous disparaging remarks on Africa. The US New African Strategy policy announced by Security Advisor, John Bolton, on 13 December 2018, at the Conservative Heritage Foundation, clearly shows that US interest in Africa lies in establishing its security and economic interests and countering Chinese influence in Africa.

On the sidelines of the G20 Summit held in Argentina in December, 2018, the BRICS Heads of States issued a joint statement criticising protectionism amid threats by the US to intensify tariffs on China and impose more sanctions on Russia.

BRICS members urged open international trade, stressing that "the spirit and rules of WTO run counter to unilateral and protectionist measures".

BRICS continues to increase its footprint in Africa and is forging strong symbiotic political and economic ties with African countries, thus heralding a new chapter in the BRICS-Africa economic partnership and development cooperation. n

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Publication:African Banker
Geographic Code:6SOUT
Date:Mar 4, 2019
Words:1327
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