BRICS as a Platform for Economic Sustainability

By Baba Yusuf

“With each new day in Africa, a gazelle wakes up knowing he must outrun the fastest lion or perish. At the same time, a lion stirs and stretches, knowing he must outrun the fastest gazelle or starve. It is no different for the human race. Whether you consider yourself a gazelle or a lion, you simply have to run faster than others to survive.” ― Mohammed bin Rashid Al Maktoum, Monarch of Dubai and Prime Minister of United Arab Emirate (UAE)…

BRICS is an intergovernmental organisation comprising Brazil, Russia, India, China, and South Africa. The aforementioned Countries are the fastest-growing world economies, It is worthy of note that China is the second largest economy in the world. 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 benefit. BRICS was founded in 2009 and has since expanded in membership, regional, international, and intercontinental spread, and influence. Egypt, Ethiopia, Iran, Saudi Arabia (though arguably so), and the United Arab Emirates officially joined BRICs on the 1st of January, 2024. BRICS currently has 10-member nations, and according to Bloomberg, about 34 new Countries have expressed interest in joining BRICS. One of the key objectives of the BRICS group is to dominate the world economy by 2050.

Therefore, it is cheery news to me and a lot of other Nigerians when Nigeria’s Honorable Minister of Foreign Affairs, Ambassador Yusuf Tuggar stated that Nigeria is currently considering the possibility of joining BRICS and that Nigeria has not given up the ambition of becoming a permanent member of the Security Council of the United Nations. The Minister made the assertions during his official visit to Russia around the 6th of March, 2024.

The BRICS strategy is certainly working as the BRICS countries include major world powers, such as China and Russia, and countries that are major powers on their continent, such as South Africa and Brazil. The group currently has a combined population of 3.5 billion i.e. 45% of the world’s population. It has a combined economy of over $ 28 trillion which is about 28% of the global economy. BRICS countries will also be producing about 44% of the world’s crude oil.

The Russia-Ukraine war has further divided the world economically with consolation of the BRICS nations as a counter-measure to the globally dollarized economy which is slowly but steadily posing a threat to the US Dollar and certainly the US economy in the mid to long term – it is just a matter of time.

To de-risk and diversify nigeria’s economy

Our current economic situation requires that we diversify our options and de-risk our economy from the “choking effect” of the US Dollar. While it is true that the US Dollar will remain a globally dominant currency of trade, the current global socio-economic and political realities clearly call for forward-thinking countries to diversify their options of investment and trade; the growing membership of BRICS is the platform of that diversification. The earlier Nigeria key into it the better for our battered economy. Let the process begin so that Nigeria will not be left behind as a sovereign nation.

In my opinion, BIRCS should be one of the pillars of our international relations and economic diversification strategy. It will not just give Nigeria the freedom of choice and options but it will also give Nigeria leverage in our international relations and economic expansion and diversification initiatives.

I commend the administration of President Tinubu for clearing the accumulated backlog of $7Billion FOREX of over $ billion that accumulated during the Buhari administration which was part of our economic woes by escalating inflation, even resulting in some diplomatic rows with the likes of the United Arab Emirates, etc. It took the current administration through the Central Bank of Nigeria, nine (9) months to ingeniously clear the backlog.

Consequently, I am of the strong opinion that going forward, BRICS is an opportunity for Nigeria to be emancipated from the shackles of US Dollars, and will certainly free and hedge Nigeria’s economy from the straight jacket situation with the US Dollars in terms of trade, investment, and international relations.

As the giant of Africa, Nigeria’s membership in the BRICS is long overdue. Let us not delay too much as we did with the AfCFTA membership, especially given the fact that we have to lay the foundation, the pillars and building blocks, and frameworks, the time is now before we start running against time. Given our currently dire economic situation, we should explore all available viable options to receive our economy and position it in a growth and development trajectory.

Points for Nigeria to note

•Top global oil producers like Saudi Arabia, Russia, Iran, and United Arab Emirates are already members of BRICS with Saudi Arabia as the 2nd largest world oil producer behind the United States of America, Russia ranked 3rd, China is 6th, Brazil is 7th, the UAE is ranked 8th and Iran is 9th, i.e. 6 of the 10 top global oil producers are in BRICS. This implies that BRICS member countries currently control almost 50% of the world’s oil production. With Oil and Gas still remaining the critical economic driver, and it will remain so for a long time, it is essential that Nigeria seize the moment to be part of this increasingly important group.

•New data from the National Bureau of Statistics (NBS) showed that FDI in the country fell by 33 percent in 2022. This is more worrisome due to the fact that the trajectory has been dwindling since 2015, as foreign direct investment (FDI) to Nigeria has plunged to $468.91 million, the lowest in at least nine years, according to official data. This has been having dire consequences on socio-economic growth. BRICS is a veritable platform for attracting significant FDIs.

•The way forward for Nigeria, is to as a matter of priority improve and upscale our competitiveness in terms of our critical infrastructure i.e., intermodal transportation network; power; logistics and supply chain platforms i.e. the airports and the entire aviation value chain; seaports and the entire maritime value chain, land borders; products value addition and processing. We also need to improve the state of our not-so-competitive manufacturing and industrial sectors that are struggling under multiple global socio-economic variables, it is a major red flag. Joining BRICS will surely support Nigeria in this regard

Foreign policy and geopolitics

Global and sub-regional peace and economics will continue to be impacted by geo-politics. Geo-politics is significantly influenced by the foreign policy direction of the United States of America and its allies and the reactionary foreign policies or initiatives by China, Russia, and other Countries.

Certainly, the Russia- Ukraine Imbroglio has ravaged the global economy almost resulting in a global recession with devastating impacts on food security, supply chain disruptions, oil supply and pricing, energy supply to Europe, and the resultant effect of the cost of living crisis, etc.

In the case of Russia, President Vladimir Putin is not likely to shift ground but rather refine his mid to long-term strategy because so far, his strategy has been working more for him than the US and EU strategy for Ukraine. If the Russia-Ukraine imbroglio continues unabated without a change in the political strategy disposition, it will continue to impact negatively on global and national economies. Based on the aforementioned, Nigeria’s over-arching national strategy has to change especially with regard to the economy, foreign policy, Trade, and Investment with foreign policy as a nexus for international Trade

Global economic gloom

• According to the World Bank; the current global economic trajectory is not looking good based on geopolitics, and climate change which has impacted food security, infrastructure, human capital, etc.

• The second half of 2024 will be the slowest half-decade of GDP growth in 30 years!

• Escalating geopolitical tensions could create fresh risks for the world economy. “Meanwhile, the medium-term outlook has darkened for many developing economies amid slowing growth in most major economies, sluggish global trade, and the tightest financial conditions in decades.”

• Cost of borrowing for developing economies—especially those with poor credit ratings—are likely to remain high with global interest rates stuck at four-decade highs in inflation-adjusted terms.

• Global growth is projected to slow for the third year in a row—from 2.6% last year to 2.4% in 2024, almost three-quarters of a percentage point below the average of the 2010s. Developing economies are projected to grow just 3.9%, more than one percentage point below the average of the previous decade.

Conclusion

What should remain etched in our minds as Nigerians, especially the current administration under the leadership of President Tinubu is the fact that based on the aforementioned realities and projections; 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 polarised world.

The Nation

Source: thenationonlineng.net