Durban, 28 March 2013 (ECA) - The 5th BRICS Summit hosted by the Government of the Republic of South Africa took place in Durban, South Africa on 27th March 2013 on the theme: BRICS and Africa: Partnership for Development, Integration and Industrialization. As part of the Summit, a BRICS-Africa Dialogue was held between the BRICs leaders and the heads of state and government of African countries representing the African Union, the regional economic communities, the NEPAD infrastructure champion initiative and the Chairs of the African Union and African Union Commission. No less than nine African heads of state and government attended the dialogue.
The prioritization of Africa's development agenda is sequel to previous commitments made by the BRICS Summits. In the Delhi declaration at the 4th BRICS Summit on 29th March 2012, the BRICS leaders noted, "we attach the highest importance to economic growth that supports development and stability in Africa, as many of these countries have not yet realized their full economic potential. We will take our cooperation forward to support their efforts to accelerate the diversification and modernization of their economies........".
Africa's economic partnership with the BRICS is an imperative necessity for Africa's economic growth and structural transformation. The BRICS countries have increasingly assumed major players in the global economy and are projected to be the largest economies in the World in the next two decades especially China. The BRICS countries represent 43% of the World's economy, approximately one fifth of global GDP estimated at about US $ 13.7 trillion, and a combined foreign reserves of US $4.4 trillion. The BRICS countries given their sizable population (40% of the World population) will constitute the largest market in the World in the next two decades.
Africa- BRICS economic relations are on the rise, although quite uneven amongst the BRICS countries. Africa's trade with the BRICS has grown faster than with any other region of the World, doubling to $340 billion in 2012 and projected to reach $500 billion by 2015. Foreign direct investment flows to Africa from the BRICS especially India, China, and Brazil have risen from 18% of the total in 1995- 1999 to 21% in 2000-2008. Also, project aid has been quite substantial especially from China.
As part of ECA's support to the BRICS- Africa dialogue, ECA produced a technical paper on: "Africa- BRICS cooperation: Implications for Growth, Employment and Structural Transformation in Africa". The study poses two major questions. What effect could trade with, and investment and aid, from the BRICS have on growth, employment and structural transformation in Africa? Second, how can Africa maximize the benefits of its engagement with the BRICS, and minimize the risks? The report noted that Africa must capitalize on its cooperation with the BRICS to develop sectors that have larger multiplier effects including manufacturing and agriculture, improve social welfare and facilitate its economic transformation. Given that the BRICS have comparative gains in the areas of profitable investments in industry, natural resources and infrastructure amongst other sectors on the continent, a partnership with Africa portends a win-win situation for both sides.
However, engaging the BRICS requires that Africa should fundamentally upgrade its strategies and capacities for comprehensive understanding of the issues, negotiation, coordination, monitoring, and sharpen its competitive edge in international trade, for it to benefit maximally from the relationship. In other words, resetting the rules of engagement will be key in ensuring mutually beneficial economic relations.
At the dialogue, there were exhaustive deliberations in the areas of trade, infrastructure and aid between African Heads of state present and the BRICS leaders. A major part of the discussion was on the possible role the BRICS Bank, a new policy decision of BRICS leaders, could play in supporting Africa's investment priorities.
In closing the meeting, the President of the Republic of South Africa, Mr. Jacob Zuma thanked all the leaders present, and acknowledged the technical support of the ECA in producing the background document for the meeting. He implored the ECA to continue to support Africa's development agenda through rigorous and empirically based policy research and knowledge products.