By George Awuru
Nigeria’s Minister of Foreign Affairs, Ambassador Yusuf Tuggar, recently affirmed that Nigeria is presently exploring the possibility of joining BRICS. In 2026, Brazil, Russia, India, and China created the BRIC group. South Africa joined in 2010, making it BRICS, an acronym of intergovernmental organization comprising these emerging market economies. An emerging market economy is the economy of a developing nation that is becoming more engaged with global markets as it grows.
Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirate [UAE] were invited to become members with effect from January 1st 2024.The objective of this organization is for strategic partnership and cooperation on investment opportunities, coordinating multilateral policies, guided by the principles of non-interference, equality, and mutual benefits.
Jim O’Neill, the Chief Economist at Goldman Sachs, in a 2021 study entitled: ‘’Building Better Global Economic BRICS,’’ identified the four countries, namely Brazil, India, Russia, and China as rising economic powers which were at a similar stage of newly advanced economic development that could , if growth were maintained, dominate the global economy by 2050.
The economic weight of BRICS is considerable. Between 2003 and 2007, the growth of the four countries reportedly accounted for 65% of the expansion of world Gross Domestic Product [ GDP]. The group currently has a combined population of 3.5 billion , about 4 5% of the world’s population. They have a combined economy reportedly of over $28 trillion, about 28% of the global economy. BRICS countries will also be producing about 44% of the world’s crude oil. According to reports, the BRICS nations offered in the last decade a source of foreign expansion for firms and strong returns for institutional investors.
Frankly speaking, the world economic ties are changing in ways never seen since the end of the cold war. The Russian -Ukraine war has further divided the world economically. But with the consolation of the BRICS nations as counter-measure to the globally dollarized economy which is slowly but steadily posing a threat to the US Dollar, and certainly its economy in the mid to long term. It is just a matter of time.
Countries are re-evaluating their trading partners based on their economic and national security concerns. Some like Nigeria and the BRICS are now re-evaluating their heavy reliance on the dollar in their international transactions and reserve holdings. Given the recent history of events, policy makers are increasingly – and justifiably focused on building economic resilience. Nigeria is currently looking at possible ways of joining BRICS given the way scarcity of dollar in the country has bastardized its economy and economic unleashed hardship on Nigerians. The government wants to strengthen the Naira, our local currency, by allowing other countries to settle their trade with the country in their own tender.
There is a growing consensus in the country for Nigeria to adopt the BRICS ideals of de-dollarization, and the sell of its crude in Naira, and not the dollar. Analysts say BRICS should be one of the pillars of Nigeria’s international relations and economic diversification strategy. It will not just give the country the freedom of choice and options but will also leverage on its international relations and its economic expansion and diversification initiatives.
South Africa hosts the New Development Bank created by BRICS countries in 2015, and it can help finance African countries’ projects to tackle their urgent challenges. ‘’One of the challenges to be overcome is the expansion of payment mechanism, notably local currencies and other financial instruments that may eventually be created in order to build a new, more multilateral and inclusive financial system’’, the bank’s president, Dilma Rousseff, said. She pointed to the need for joint infrastructure projects between several countries, noting that Africa has the world’s greatest untapped hydroelectric potential.
Indeed Foreign Direct Investment [FDI] is now being re directed along geo-political lines. In fact geo-politics today is significantly influenced by the foreign policy direction of the United States and its allies, and the reactionary policies or initiatives by China, Russia, and other countries. What should be etched on the minds of Nigerians is that it will be a good de-risking economic strategy for Nigeria to be part of BRICS as a ‘’shock absorber’’ for sustainable economic growth in an increasingly polarized world.
Awuru, a public Affairs Analyst writes from Lagos.
