June 18, 2024

BRICS pact a formidable platform for tangible traction, says SEIFSA

3 min read

The Steel and Engineering Industries Federation of Southern Africa (SEIFSA) commends South Africa and the South African BRICS Business Council on the successful hosting of the BRICS Summit and Business Forum. Although the summit is still ongoing, the traction on a number of fronts thus far is welcomed and encouraging.

SEIFSA is a national federation representing 18 independent employer associations in the metal and engineering industries.

The world has stood to take notice that the BRICS pact is not simply a loose agreement, but a formidable platform on which tangible traction is being registered. South Africa has done a phenomenal job to showcase this and encouragingly brought the entire African continent along.  

On matters of economic policy, co-operation – in any form – is always critical. Moreover, co-operation between a group of countries that constitute 30% of global gross domestic product (GDP), 42% of total population and 20% of international trade, presents a real opportunity to move the needle on economic progress among these countries.

The global South has historically been fragmented in its approach to economic co-operation, and the BRICS platform is a key and strategic avenue to achieving this. More than 40 countries have expressed interest in joining BRICS and, of them, nearly two dozen have formally asked to be admitted. Expanding the bloc with additional countries will only serve to strengthen the reach, clout and influence of the co-operation. 

At the BRICS Manufacturing Forum hosted on 21 August, an event at which SEIFSA participated, two memoranda of understanding (MoUs) were signed between the Department of Trade, Industry and Competition and the China-African Development Fund; and a second between the Bank of China and the Industrial Development Co-operation. Both MOUs focused primarily on deepening industrialisation and collaborating development funding institutions’ funding for special projects in South Africa.

BRICS provides South Africa with huge opportunities. The BRICS economies account for about 21.3% of South Africa’s trade with the world in 2022. However, talking up our potential is not good enough. We need policies to be implanted with speed and urgency in order to enable companies to become globally competitive in areas where we have competitive advantage so that we can grow our economy and exploit global opportunities. Furthermore, South Africa must push for the accelerated implementation of the African Continental Free Trade Area (AfCFTA) to boost the continent’s economic growth. 

The AfCFTA, which came into effect in January 2021, will become the world’s largest free-trade area. This agreement will seek to connect 1.2 billion people across 55 countries that have a combined GDP of $3.4 trillion. As a country, we have to take advantage of this development on our doorstep and position ourselves as a country and continent that can produce goods the BRICS countries want. 

South African companies are the largest trading partners on the content; BRICS and AfCFTA offers huge opportunities to grow our economy and address the unacceptably high level of unemployment. 

SEIFSA welcomes the report that Chinese investors view South Africa as one of the most attractive investment destinations on the continent. This underscores SEIFSA view that, despite the headwinds the economy has faced in the recent past, opportunities remain abounding. It will be incumbent on South Africa to capitalise on this and many other positive outcomes.

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