South Africa will use its position as the 2023 chair of the Brazil, Russia, India, China and South Africa (Brics) multilateral bloc to advance the interests of African States, under the theme of 'Brics and Africa partnership for mutually accelerated growth, sustainable development and multilateralism'.
Trade, Industry and Competition Minister Ebrahim Patel, during a South Africa Brics Business Council working groups briefing on March 30, said South Africa exported a significant quantity of goods to other African countries and this was where its largest potential for growth lay.
The volumes and value of trade between South Africa and other Brics countries were significant. However, much of the exports were simply to supply raw materials, particularly minerals, to these economies, he highlighted.
In addition to precious metals, the primary products exported are coal, iron-ore, manganese and chromium, as well as some semi-manufactured goods. Mining products dominate the export basket to South Africa's Brics partners.
"While we will continue to export raw materials, we must not become trapped as the supplier of raw materials to other countries when there are opportunities to add value locally and create more
jobs in South Africa. This is a classical neocolonial trap that must be avoided," he emphasised.'
How South Africa may leverage the BRICS chair for agribusiness
Therefore, the composition of South Africa's trade with Brics partners must change to enable more South African manufactured goods to be exported.
"Our economic engagement in Brics must help to boost South Africa's localisation strategy and entail the development of local industrial capacity to supply domestic and export markets. Further, we must not only focus on what we sell, but also on the investments we can attract and securing the technical knowledge we require."
South Africa and Africa cannot only be importing partners of the vast industrial might of Brics countries but must forge economic and commercial relationships to drive their own industrialisation agendas.
Increased industrial cooperation can be achieved through knowledge and best practice sharing programmes. Industrialisation is the means by which Africa's economies can become wealthier and grow faster and more inclusively, Patel added.
"Africa supplied raw materials that contributed to the industrialisation of other parts of the world. It is now time to use our resources to drive our own industrialisation. South Africa sees its chairing of Brics in 2023 as an opportunity to drive African industrialisation."
South Africa, Africa and Brics countries are not moving in tandem and discussions in government and the private sector should focus on developing a common approach to look at opportunities that exist between Brics countries for the benefit of South Africa and Africa, concurred South African ambassador and Brics sherpa Professor Anil Sooklal.
"We can and must do better. All Brics countries have major relations with African countries and the Brics bloc of countries, with 31.5% of global gross domestic product (GDP), has overtaken the G7 [advanced economies bloc], with 30%, mainly owing to the growth of China, which has contributed 30% of global growth over the past ten years," he highlighted.
There was great opportunity for South Africa and Africa, but they were not leveraging this potential sufficiently and required a dedicated strategic approach by government and the private sector.
India also saw a massive surge in trade during the past year and, although South Africa's trade with Brazil and Russia is small compared to its trade with the other two Brics nations, all the Brics countries represent tremendous markets for the country.
"However, why are they selling more into our economies, but we are not flooding their markets with our products, whether raw materials or other products? We keep emphasising that we must balance trade, but what are we doing to seriously address this issue? The opportunities are there and these markets continue to grow," Sooklal emphasised.
The world is seeing changes that have not been seen in the past 100 years and Brics is at the centre of reshaping geopolitical and geoeconomic architecture. This presents an opportunity to create a fairer and more just global community, and business must be at the centre to reap the economic benefits of South Africa's membership of Brics.
Brics has become an important part of South Africa's relations with the global community, and not only in terms of economies, trade and investment. However, the private sector is an important engine in cementing and expanding the relationships between Brics countries, Sooklal said.
South Africa's chairing of the Brics bloc is a unique opportunity for South Africa to impose some of its priorities within Brics and more broadly in geopolitics.
"However, we need to turn a lot of this good sentiment and talk into deals and trade," said South Africa Brics Business Council member and Aspen Pharmacare Group strategic trade development senior executive Dr Stavros Nicolaou.
The South Africa Brics Business Council intends to analyse and provide analysis of trade statistics at each of the quarterly meetings during the year of its chairing the Brics Business Council.
"There are significant trade imbalances and deficits. These are disproportionate and part of our work in the Brics council is to find complementarities and opportunities to balance trade, as well as grow trade between Brics and the rest of the world. Complementarities will also contribute to economies of scale and the strengthening of particular sectors or industries," he said.
Of South Africa's trade with Brics countries, 72% is with China, 22% is with India, 3% with Brazil and 3% with Russia. Analysis of the trade shows significant raw material exports leaving the country, but the return trade is in finished products, usually in highly advanced manufacturing industries or sectors.
"We need to identify where the raw materials exports are taking place and how we can get to grips to turn those to advanced manufacturing opportunities for the country, in line with South Africa's ambition to industrialise the country," said Nicolaou.
"We are also acutely aware of the geopolitical and geoeconomic reorientation, leading to a new era in global politics and a new economic era. However, South Africa needs to box clever and navigate these changes if we are to seize the opportunities presented by the global rearrangement that is happening before our eyes," he emphasised.
"Brics represents a long-term economic vision for middle-income economies. All the Brics countries share a common need to avoid the middle-income trap to transform their economies by developing sustainable industries and high-end services industries," said Department of Trade, Industry and Competition deputy director-general Lerato Mataboge.
"The Brics [bloc] can be a useful lens through which we can view the core economic cooperation among middle-income countries. This is the reason [South Africa] joined Brics and why other countries want to join the grouping, as it provides opportunities for middle-income economies," she said.
However, the bloc needs a programme of cooperation to open new trading opportunities, beyond only tariff policies, and especially cooperation in terms of industrial development and financing, she added.
Brics has become a significant player in the world economy and world trade, and South Africa is a small part of this grouping, said business lobby Business Unity South Africa CEO Cas Coovadia.
"We look forward to chairing the Brics Business Council [in 2023], but must determine what the measure of success would be. Prioritising the African continent is critical, including from a business context, as South African businesses are significant investors on the continent.
"We need to ensure that, as chair of the council, we put the African agenda in the top priorities of the bloc, particularly to see how our position as chair can activate the African Continental Free Trade Area," he noted.
