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The 10th annual Brics Leaders’ Summit took place in Sandton, Johannesburg, from 25-27 July 2018, heralding a decade of cooperation. 

It attracted international heads of state, business leaders, civil society organisations and academics, not only from the Brics countries (Brazil, Russia, India, China and South Africa) but also from a number of African countries, the African Union, other emerging markets and the United Nations.  In addition to the main summit, a number of inter-ministerial events took place before the event while the Brics Business Forum and Film Festival was staged in Durban.  South Africa has been a full member of Brics since early 2011.


The theme for the summit was ‘Brics in Africa: Collaboration for Inclusive Growth and Shared Prosperity in the 4th Industrial Revolution’.


South Africa signed three memorandums with India relating to the establishment of the Ghandi-Mandela Centre of Specialisation for Artisan Skills, the development of partnerships in the field of space exploration and the promotion of human resource development in the agricultural sector.  South Africa and Russia also signed an agreement on cooperation in the agricultural sector, with special focus on water resource management.  Another outcome of the summit was the decision to establish a BRICS vaccine research and development centre in South Africa.


Has South Africa benefited at all from the establishment of the BRICS New Development Bank (NDB)?


Since its inception in 2016, the NDP has issued 23 loans, two of which have been to South Africa.  The first, issued in 2016, was for US$ 180 million to Eskom to connect independent renewable energy power plants through transmission lines to the national grid.  This was expected to increase Eskom’s capacity by 670 MW and to avoid 1.3 tonnes of carbon dioxide emissions per year.  The loan was not, however, immediately taken up – partially because the energy utility had stopped buying renewable energy in favour of a plan to build a fleet of nuclear power plants.  However, Eskom has since given the assurance that the loan will be taken up.

In 2018, the NDB gave a second loan of US$ 200 million to the South African government to finance the reconstruction of Durban’s container terminal berth.

Bank officials have indicated that the bank will soon issue its first regional loan to help finance Phase 2 of the Highlands Water Project, increasing the flow of water from South Africa’s mountainous neighbour to Gauteng.


And what of trade?  Has the BRICS connection had any significant impact on South Africa’s importers and exporters?


The trade figures show a slight improvement since South Africa joined BRICS.  Exports to BRICS of manufactured goods showed a small upward trend, from 13% of all exports in 2011, to 21% in 2016. The percentage of raw materials exported, however, declined slightly from 77% in 2011 to 70% in 2016.  Manufactured goods, machinery and transport equipment continued to dominate South Africa’s imports from its BRICS partners over that period, remaining at about 60% of total exports.  Regretfully, BRICS membership to date has done little to solve the imbalance in trade in value-added products.

Earlier in April, the BRICS Customs Administrations gathered in Durban for the 10th Annual BRICS Customs Experts Technical Working Group hosted by SARS.  A key focus area was the establishment of an enabling legal framework for BRICS Customs cooperation.

The BRICS countries have implemented various models of Authorised Economic Operator (AEO) programmes which give preferential treatment to certain traders, importers and exporters.  While the AEO programmes have demonstrated their effectiveness in strengthening supply chain management and economic competitiveness, the BRICS member countries are at different stages of development making it difficult to have one programme applicable to all.  It was thus agreed at the meeting that it would be better at this stage to share information and identify priorities with the aim of working towards bilateral agreements.


In conclusion…..


Since its origin, BRICS has struggled to take shape as a body voicing cohesive positions on politics and forging deeper trade ties.  Its collective gross domestic product (GDP) grew more than six-fold from US$ 2.7 trillion in 2000 to more than US$ 17 in 2017, eclipsing the GDP of the European Union!  However, according to Standard Bank, the value of trade between its members has actually fallen nearly 9% to US$ 312 billion over the past five years.

According to some analysts, agreeing preferential trade policies between BRICS members is a logical next step.  But that may still be some time in the making.  China already dominates BRICS and is involved in 80% of the trade within the bloc.  Opening the door to more and cheaper Chinese imports could be seen as too great a risk for the group’s smaller, less industrialised members, like South Africa.