Why the BRICS Aren’t Crumbling in Africa
Despite Russia’s decline and China’s economic woes, the idea of a nondollarized economy has strong appeal across the continent.
Welcome to Foreign Policy’s Africa Brief.
Welcome to Foreign Policy’s Africa Brief.
The highlights this week: BRICS leaders meet in South Africa, Nigeria’s government freezes fuel price hikes, and Zimbabwe holds another questionable election.
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African Leaders Want to Join the BRICS
A summit of the BRICS group—Brazil, Russia, India, China, and South Africa—began yesterday in Johannesburg. At least 30 of the more than 60 heads of state and government invited to join the meeting were from Africa.
Attending the summit in person are Chinese President Xi Jinping, Indian Prime Minister Narendra Modi and Brazilian President Luiz Inácio Lula da Silva. Russian Foreign Minister Sergey Lavrov is standing in for President Vladimir Putin to avoid risking Putin’s arrest due to an International Criminal Court indictment. (As a signatory to the court, Pretoria would be obliged to arrest Putin if he entered the country.)
The bloc will discuss de-dollarization and ways to increase the use of local currencies in trade, though experts are skeptical that the idea of a joint currency could come to fruition. What may happen is an increased use of the Chinese renminbi. A growing number of African nations, including Mauritius, Nigeria, and Zambia, already use the renminbi as a reserve currency.
BRICS nations account for more than 40 percent of the world’s population, and in March, they surpassed the G-7 nations in terms of GDP. There are around 23 nations eager to join, including Algeria, Egypt, Ethiopia, and Senegal. Criteria for expansion is a topic of discussion at the meeting.
In a speech on the eve of the summit, South African President Cyril Ramaphosa emphasized that South Africa supports BRICS expansion and partnering with other African nations, through which the “continent can unlock opportunities for increased trade, investment and infrastructure development.”
Expansion, for him, would fulfill “a common desire to have a more balanced global order.”
Tensions have grown between the United States and South Africa over Pretoria’s close ties with Moscow. The U.S. ambassador recently accused South Africa of supplying weapons to Russia. Ramaphosa has insisted that his country won’t be drawn into a contest between global powers.
“During the ‘Cold War,’ the stability and sovereignty of many African countries was undermined because of their alignment with the major powers,” he said in the speech. “This experience has convinced us of the need to seek strategic partnerships with other countries rather than be dominated by any other country.”
But facing domestic opposition to an overtly close partnership with Putin, he sought to reiterate his government’s commitment to an Africa-led negotiation for peace in Ukraine.
As much as there is a perception that Africa seeks a relationship with Moscow, a mere 17 heads of state participated in the Russia-Africa summit held in July.
More importantly, the large African attendance at the BRICS summit highlights the continent’s insistence on changes to the World Bank and International Monetary Fund. Algeria submitted a request to become a shareholder member of the BRICS New Development Bank with a contribution of $1.5 billion, according to Algerian network Ennahar.
Algeria, a vital gas supplier to Europe since Russia’s invasion of Ukraine, has faced pressure from U.S. officials to stop buying arms from Moscow. The north African country has sought to join BRICS in order to secure its sovereign trade interests with Beijing and Moscow.
The BRICS bank, a World Bank-style institution, aims to reach 30 percent of lending in local currencies by 2026. According to Ramaphosa, the bank has funded infrastructure projects in South Africa to the value of 100 billion rand, approximately U.S. $5.3 billion.
Egypt joined the bank in February to help ease its shortage of the greenback. Egyptian Supply Minister Ali Moselhy said in June that Cairo planned to pay for imports from India, China, and Russia in their local currencies instead of the U.S. dollar.
Many African leaders view the dollar’s dominance over the global financial system as impeding their nations’ economic growth, particularly after U.S. interest rate hikes and Russia’s invasion of Ukraine strengthened the dollar against almost all major currencies and raised the cost of importing goods priced in dollars.
China is keen to see rapid expansion of the group, as this would solidify its sphere of influence. Reports suggest that India and Brazil oppose the proposal, wary of admitting any members with an agenda to alienate the West.
But of course, the benefits of joining BRICS is somewhat diminished as China faces an economic downturn and Russia becomes a pariah state. Only about 6 percent of BRICS members’ total trade is with each other. Nigeria, a nonaligned state and Africa’s largest economy, which is interested in the bloc’s call for U.N. Security Council reforms but also supportive of strengthening Western partnerships, had considered joining BRICS. But Nigerian officials have, for the time being, chosen to prioritize multiple domestic crises rather than BRICS accession.
The Week Ahead
Tuesday, Aug. 22, to Thursday, Aug. 24: BRICS Summit continues in Johannesburg, South Africa.
Tuesday, Aug. 22, to Friday, Aug. 25: U.N. Climate Finance Workshop for Economic Community of West African States (ECOWAS) members continues in Bonn, Germany.
Wednesday, Aug. 23: General election held in Zimbabwe.
Friday, Aug. 25: Brazil’s President Lula to visit Angola to meet President Joao Lourenco.
Nigeria releases data on second-quarter economic growth.
Saturday, Aug 26: Gabon holds a general election.
Monday, Aug. 28: U.N. Security Council discusses Mali.
Monday, Aug. 28, to Friday, Sep. 1: African health ministers meet for the 73rd session of the World Health Organization Regional Committee for Africa, held in Gaborone, Botswana.
What We’re Watching
Zimbabwe election. Zimbabweans head to the polls today in the country’s second ostensibly democratic presidential election since the military ousted longtime dictator Robert Mugabe in 2017.
Eleven candidates are vying for the presidency, but realistically the contest is a rematch between 80-year-old incumbent President Emmerson Mnangagwa of the ruling Zanu-PF party and 45-year-old opposition leader Nelson Chamisa of the Citizens Coalition for Change.
Mnangagwa’s 2018 win was widely disputed and marred by allegations of voting irregularities and state violence, during which six people were killed when security forces opened fire on protesters in the capital Harare. Chamisa is popular among urban voters and came second in 2018 with 44 percent of the vote. He has pledged to tackle corruption and improve access to basic education and health care. The country’s stagnant economy, hyperinflation, and government corruption in minerals management are core issues for voters. A candidate must secure more than 50 percent of the votes to win. If there is no outright winner, a runoff between the top two candidates will be held on Oct. 2.
Zanu-PF has been in power since independence in 1980 and spent this election year jailing political opponents and their supporters. The Patriotic Bill signed into law last month includes the death penalty for anyone found guilty of “willfully damaging the sovereignty and national interest of Zimbabwe” and in effect bans criticism of the government, according to rights groups. A legacy of voter harassment means it is doubtful that the elections will be free and fair.
Niger coup. Gen. Abdourahamane Tchiani, who took power in a coup on July 26, says the military will return Niger to civilian rule in three years, a proposal rejected by the ECOWAS regional bloc. Tchiani made the statement in a televised address on Saturday night after talks with mediators from ECOWAS in the presence of ousted President Mohamed Bazoum. The new U.S. ambassador to Niger, Kathleen FitzGibbon, arrived in Niamey on the same day.
ECOWAS had announced a “D-day” for military intervention in Niger without specifying a date. The bloc of West African nations, under the chairmanship of Nigerian President Bola Tinubu, had agreed to deploy a “standby force” to restore constitutional order in Niger. However, what action the force would take remains unclear since military intervention is deeply unpopular among northern Nigerian politicians, and the country has the region’s largest military force. Niger, one of the world’s poorest countries, is experiencing power cuts and rising food prices after Nigeria closed its trade borders and cut electricity supply to the country.
Tinubu’s rollbacks. Tinubu approved 5 billion naira ($6.5 million) for each of the country’s 36 states (partly as a grant and partly as a loan) to purchase and distribute rice, maize, and fertilizer to cushion the effects of rising food prices and the removal of a controversial petrol subsidy for residents.
Notorious traffic jams in the financial hub of Lagos have disappeared in recent weeks as a result of oil price hikes after Tinubu floated the country’s currency exchange rate and scrapped fuel subsidies, which cost the government $10 billion last year.
However, last week, he froze the raising of gasoline prices after inflation climbed to an 18-year-high of nearly 24.1 percent. Despite prices having risen 200 percent since the subsidy removal, Nigerians still pay the lowest price for petrol in West Africa and investors demand change. Last month, Tinubu said the country saved $1.32 billion in just two months by scrapping the subsidy, and that the savings could fund infrastructure development and badly needed oil refineries in the country.
After fuel price hikes were halted, Nigeria’s dollar debt briefly became the worst emerging-market performer. Yet, Tinubu is not the first Nigerian president to walk back fuel subsidy removal. Goodluck Jonathan and Muhammadu Buhari also increased petrol prices and then significantly lowered them to reinstate subsidies after mass protests and panic buying. By stopping the price hikes, the government is in effect subsidizing again.
The Week in Tourism
Heat boost. Excessive heat in Europe resulted in a tourism surge for some African countries. Egypt welcomed more than 7 million tourists in the first half of 2023, setting a record facilitated by the devaluation of the Egyptian pound. “Winter is our peak tourism season. What is astonishing this year is that business is strong during summer all over Egypt. Europe this year witnessed extreme heat waves and wildfires while in Egypt the weather has been great and that made it attractive,” said Atef Abdel Latif, chairman of Musaferoun for Travel and Tourism. The number of visitors to Mauritius increased 58 percent, to 596,446, with a 70 percent surge in tourism revenue to $779 million in the first five months of the year compared with the same period in 2022, according to data published by the Bank of Mauritius. French visitors increased 60 percent and German visitors by 36 percent.
Road tripping. A group of tenacious Ghanaians drove more than 6,000 miles from Accra to London. Known as “Wanderlust Ghana,” the team made up of philanthropists and tourism enthusiasts traveled through Senegal, Mauritania, Morocco, Italy, Germany, and France to reach the United Kingdom, all to raise money for primary schools in rural Ghana. A flight from Accra to London takes about seven hours, but the group spent 16 days on the road to reach their destination.
Chart of the Week
Nigerian President Bola Tinubu is under pressure to deliver the structural changes that investors demand, but he must reckon with public discontent and the economic pain of citizens. In 2022, Nigeria saw foreign direct investment flows turn negative, to -$187 million, according to a new report from UNCTAD. Overall, foreign direct investment flows to Africa declined 44 percent in value in 2022, dropping to $45 billion. North and East Africa were the only regions to experience investment growth, at 58 percent and 3 percent respectively. Interestingly, the report reveals how African nations remain intrinsically linked to Europe despite the rising influence of China. Former colonial powers remain by far the largest holders of foreign direct investment stock in Africa, led by the United Kingdom ($60 billion), France ($54 billion), and the Netherlands ($54 billion).
FP’s Most Read This Week
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El Niño Is Coming—and It’s Going to Be Bad by Cullen Hendrix
What We’re Reading
Zimbabwe’s sound of protest. Zimbabweans head to the polls today. In the Lede podcast, journalist Kwangu Liwewe explores Chimurenga, a style of protest music established by Thomas Mapfumo and his band, The Blacks Unlimited. Chimurenga mixes local instruments with reggae and jazz, and became popular during Zimbabwe’s struggle against white-minority rule in the late 1960s. It loosely translates to “collective fight” or liberation in Shona and continues to be a popular genre for expressing grievance with Zimbabwe’s politics.
In the podcast, Mapfumo, whose music led to his exile in the United States, told Liwewe that the removal of longtime dictator Robert Mugabe has changed nothing in Zimbabwe. “There is nothing that has been done good by the ruling party and this is the reason why … Zimbabweans are crying for a change” he said.
Liberia’s dissatisfied young voters. Thousands died in Liberia’s two civil wars between 1989 and 2004, which destroyed the economy and social stability in the country. Young first-time voters living in Africa’s oldest democracy have no memory of the civil war yet will determine the results of the country’s general election held in October, argues Nyema Richards in African Arguments. Issues around climate change, improved access to health care, and accountability on corruption are driving their political participation, Richards writes.
Nosmot Gbadamosi is a multimedia journalist and the writer of Foreign Policy’s weekly Africa Brief. She has reported on human rights, the environment, and sustainable development from across the African continent. Twitter: @nosmotg
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