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Getting real about BRICS trade — SA’s political and economic foreign policies often at odds

Bhaso Ndzendze
By Bhaso Ndzendze
16 Oct 2024
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BRICS membership has not seen more industrialised imports from South Africa, nor has it seen fairer trade. This lends weight to the argument that the BRIC countries actually contribute to South Africa’s high unemployment, not to its alleviation.

Earlier this year, South Africa again surpassed Nigeria as Africa’s biggest economy in what has become something of a topsy-turvy race on the continent.

However, for all the hype about South Africa boasting the most diversified economy on the continent, the country remains a highly unequal society, with a large part of the population living in poverty. For a country whose population is mostly living below the poverty line (as much as 55% from the latest figures), trade offers potential for reducing high unemployment.

Sadly, however, South Africa’s exports represent roughly 0.49% of the world’s total, a paltry figure for a country with the continent’s most diversified economy with sectors such as mining, agriculture, tourism and other services and a world-class financial sector.

Increasing exports has been declared a priority for the current coalition government. There is widespread recognition – across the political spectrum – that the country’s keys to prosperity lie in industrialised exports in particular.

Win-win after all?


One of the relationships that South Africa’s government has intentionally sought to nurture is with the BRIC countries (Brazil, Russia, India and China). In his opening remarks at the 2023 BRICS Summit, to which he was host, President Cyril Ramaphosa rearticulated the hopes hitched on the BRICS formation for growth through trade.

“We see the BRICS partnership as a catalyst for global growth and development that responds to the needs of all nations. It is the right of Africa and the entire Global South to fully reap the benefits of global trade and investment. Without trade and investment our economies cannot thrive and our peoples’ material conditions cannot improve,” he said.

South Africa entered the formation in 2010, transforming it into BRICS. At almost a decade and a half of membership, it is worth relooking at whether South Africa benefits from its membership in the association.

The country’s exports to the original BRIC countries stood at R88-billion in 2010. By 2023, they stood at R337.29-billion. Through all these years, they had grown by leaps and bounds. By my own calculations, they have grown by an average of 11.49% year on year.

On the other hand, however, the two-way trade has also increasingly favoured the other members over South Africa. In 2010, South Africa was in a trade deficit of R26.9-billion, and by 2023 it had reached R240-billion. In other words, South Africa buys substantially more from all the BRIC countries than they do from South Africa.

By contrast, South Africa’s trade balance with the European Union has seen South Africa enjoy a trade surplus of between R19.7-billion and R112.3-billion in the years between 2020 and 2022. In other words, it has proven easier for South Africa to sell more goods in a surplus-generating manner to 28 countries than to four who are supposed to be Pretoria’s principal partners in world affairs.

Furthermore, the EU’s imports from South Africa are also structurally different to those from the BRIC countries. In 2023, for example, South Africa’s top exports consisted of vehicles.

Meanwhile, the BRIC countries are not buying South Africa’s manufactured goods. Instead, they are purchasing raw materials. Out of all South African exports to these countries, 10 of the top products in 2023 were primary goods consisting of raw minerals and agricultural produce.

None of the four countries imports South Africa’s machinery and vehicle offerings at any meaningful level. In 2023, South Africa sent a combined total of R983-million and R980-million worth of these product classes respectively; compare that with R486.9-billion worth of vehicle exports to the EU in 2023, and R22.4-billion to the US.

Although primary goods are important pillars in the South African economy, they are not the sort of industrialised goods needed to develop the economy and address unemployment. If industrialisation is the goal, then South Africa’s BRIC partners are playing no discernible role in trade through development.

Politics over national economic interest


So far, the results show the forum to be mainly a political club rather than an economic one from which South Africa can derive much-needed economic benefits. Membership has not seen more industrialised imports from South Africa, nor has it seen fairer trade.

This reality, combined with the longer-term decline of South African textile exports, lends weight to the argument that the BRIC countries actually contribute to South Africa’s high unemployment, not to its alleviation.

Indeed, the whole logic of the BRICS presents a paradox: a group of developing countries are bound to compete rather than cooperate with one another over similar markets as they pursue their individual economic growths (and so far South Africa seems to be losing, although India has similarly had trade disputes with China, the dominant winner).

Read more: 2024 BRICS Summit to be chaired by Russia — Fairer global order or bigger Putin support group?

Allusions to Global South solidarity and BRICS-aided growth, the sort expressed by the President earlier, are politically idealistic and seem removed from economic reality.

To be clear, the EU’s and US’s relationships with Africa (if not with South Africa specifically) are also exploitative in many respects.

But we must equally be clear that the BRIC nations enjoy a mercantilist-like level of imbalance in their trade relations with South Africa. Reversing that will require getting real about the intensity of focus South Africa gives to the group, and the risks that come with the economic relationship it has fostered with it as one of the smallest members (South Africa no longer has that sole title following the entry of Ethiopia in January).

As it stands, the BRICS is not well-defined, it has no treaty, and thus no real framework to formally establish its goals and members’ obligations to each other. Therefore, concessions made by the bigger partners, notably China, towards buying more industrialised exports from South Africa are only paper guarantees.

As they prepare to attend the 16th BRICS summit, set to take place in Russia between 22 and 24 October 2024, South African government officials will need to be clearer on what exactly the country is supposed to accrue out of its BRICS diplomacy.

It certainly has not been meaningful trade growth so far. DM

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