The city of Johannesburg recently hosted the BRICS Summit, bringing together leaders from Brazil, Russia, India, China, and South Africa.
With over 60 leaders in attendance, including 30 from African nations, the summit underscored the increasing influence of these emerging economies.
Shifting Away from Dollar Reliance: A Focus on Local Currencies in Trade
Central to the discussions at the summit was the topic of reducing reliance on the U.S. dollar and promoting the use of local currencies in international trade.
While there are ongoing doubts about the feasibility of adopting a shared currency among the BRICS countries, the Chinese renminbi is steadily gaining prominence.
This is evident in its growing status as a reserve currency in various African nations, such as Mauritius, Nigeria, and Zambia.
African Interest in BRICS Membership
The summit also highlighted African leaders’ interest in becoming a part of the BRICS alliance.
The discussions revolved around strategies to boost the use of local currencies in trade and explore ways of de-dollarization.
Despite skepticism surrounding the possibility of adopting a unified currency, the potential for the Chinese renminbi to play a more significant role is being considered.
Several African countries are already employing the renminbi as a reserve currency, including Mauritius, Nigeria, and Zambia.
BRICS Expansion and Growing Influence
The BRICS countries, representing 40% of the world’s population, surpassed the GDP of the G-7 nations in March.
This growing influence has led to the interest of 23 additional nations in joining the alliance.
The expansion criteria were among the topics discussed during the summit.
South African President Cyril Ramaphosa emphasized the importance of expanding BRICS, fostering partnerships with African nations, and enhancing trade, investment, and infrastructure.
Ramaphosa’s Stance and the Geopolitical Landscape
President Ramaphosa’s position is also influenced by the escalating tensions between South Africa and the United States due to its close ties with Russia.
Despite accusations and strains in the relationship, Ramaphosa prioritizes strategic partnerships over global alliances.
This stance is highlighted in his support for expanding BRICS and encouraging more countries to join the alliance.
Algeria’s Bid to Join BRICS Bank
The BRICS summit also highlighted the demand for institutional reforms in international bodies like the World Bank and the IMF.
Algeria, for instance, expressed its interest in becoming a shareholder member of the BRICS New Development Bank by pledging $1.5 billion.
This move is seen as an effort to strengthen trade relations with China and Russia, particularly in light of pressure to limit arms purchases from Russia.
Challenges and Considerations for BRICS Expansion
While the BRICS alliance seeks to challenge dollar dominance and promote economic cooperation, there are challenges.
China is advocating for BRICS expansion, but countries like India and Brazil remain cautious about aligning too closely with Western powers.
Economic difficulties faced by China and Russia’s geopolitical isolation have also affected the appeal of the BRICS alliance.
Nigeria, despite initially considering membership, currently prioritizes addressing domestic crises over joining the bloc, emphasizing the complex dynamics at play.