The year 2023 marks 13 years since South Africa became part of the Brics partnership agreement and a decade since the establishment of the Brics Business Council.
These relations, transforming the face of economic power, are not fostered through imperialist impositions but a mutual agreement between states, to reconfigure economic relations and geopolitics in the global arena.
Increasing membership interest asserts that Brics is expanding its footprint as an influential economic body in the contemporary world, currently representing 41% of the world’s population. It’s becoming the economic avant-garde for future trade relations globally.
South Africa is hosting the 15th Brics Summit at a time of radical shifts in geopolitics, such as the West’s dwindling dominance. The need for strengthened South-to-South relations has become more urgent in the context of recent destructive unilateral sanctions as well as long-standing anti-competitive trade practices.
Global disruptions provide a compelling case for strengthened regional blocs and re-thinking trade partnerships with greater and more fruitful trade reciprocity.
It also takes place at a time where 54 of the 55 member states of the African Union have signed the African Continental Free Trade Area (AfCTA) agreement. Global disruptions over the past decade have identified the need for regional supply chains and self-reliance.
The ethos of Brics is to open alternative channels of trade, reduce and subsequently eliminate the heavy reliance on dollar markets. The World Trade Organisation (WTO) standards are proving ineffective in this new economic dispensation.
Conversations at the summit are aimed at catalysing growing investment in sustainable energy solutions, road, rail, initiatives — such as the establishment of multilateral open skies dispensation for Brics countries, and port links for accelerated trade movement in the Brics family.
Agreements such as AfCTA and Brics are imperative intra-regional trade initiatives to offset global supply chain disruptions and price shocks, which are largely caused by other countries, resulting in detrimental economic ramifications for the global South.
However, the economic impact of these relations can only be fostered and made possible by each state. The greatest bone of contention in all conversations that have taken place thus far, has been South Africa’s trade participation in the Brics economies.
While South Africa’s exports have shown an upward trajectory in 2022 to the Brics economies by 7.1%, major economies in Brics accounted for about 21.3% of South Africa’s total trade in 2022, with China having the lion’s share of this at almost 68%.
Brazil, Russia, India and China have seen an increase in imports from South Africa.
Our export basket largely includes primary products in the mining sector and very little processed finished products which stimulate industrialisation and expansion of the value chain. Herein lies the opportunity to rewrite the downward economic trajectory currently characterising the SA economy.
A concession can be made that the government has made efforts to create awareness about the economic significance of the partnership agreement. Including an attempt to take the conversation where most needed, in the townships.
The essence of any trade agreements is ensuring capital meets product, buyers meet sellers. A black-owned wine-making company, for example, got an opportunity to showcase their products at the Brics exhibition in Gallagher. He narrated his story of how he knocked on governments’ doors for assistance to attend the Russia-Africa summit in St Petersburg.
After getting loans and assistance from associates and friends, he made the costly trip to Russia. He came back with a trade agreement to import Russian Vodka and export his wine to Russia.
This is the story of one of the exceptionally lucky few but also exposes challenges faced by small businesses in accessing markets. There is still a lot of red tape and constraints for companies to access opportunities, such as trade exhibitions and getting opportunities to showcase their products to potential buyers in the Brics economies.
One of the initiatives which took place during the Brics summit side activities were direct engagements of actual businesspeople from Brics economies meeting local businesspeople.
The government must ensure that local companies sustain these relations with potential trade partners post summit. There is a great demand for processed products for food, beverages and South African-made clothing. The government is creating an enabling environment for strategic trade partnerships beyond the major agreements signed by those in the higher echelons of capital.
The “township economy” — mainly youth-owned or women-owned businesses — plays an integral part in economic recovery. There is an opportunity to create a virtual marketplace or business portal where Brics business people can meet and converse on possible product exchange.
One of the biggest challenges for the government is red tape caused by inconsistencies in the policy discourse. This could potentially dampen the spirited efforts of the summit to ensure that there is awareness and a culture of ease of doing business.
There is room for expansion in the manufacturing and agricultural sector with all trade partners. There are opportunities in areas of exporting non-alcoholic beverages, alcoholic beverages and vehicle parts, given the immense investments in component manufacturing in the automotive sector.
The government needs to find a coherent way of supporting SMMEs, which are the bedrock of the economy. This era of economic reconfiguration globally requires a generation of radical doers and thinkers unapologetic about pushing boundaries to put their country first.
AfCFTA promises greater economic stimulation through entrepreneurship and expanded trade relations. South Africa’s catalyst role in Brics holds the promise of the steady growth of trade facilitation linked to the agreement.
