The 50th Brics summit held in Johannesburg late last year is regarded by most analysts as epochal in both geoeconomic and geopolitical terms. As of 2023, the economic weight of the initial five nations in GDP terms has already surpassed that of the G7 made up of the world largest developed economies.
The entry of the six new members into the Brics family – Egypt, Ethiopia, Argentina, Iran, Saudi Arabia and the United Arab Emirates – signifies, as described by various political analysts, a shift and an expansion in the global landscape.
But the big question is: will ordinary South Africans take advantage of the opportunities presented?
South Africa’s influence as a Brics partner signals an opportunity for South Africans to increase their interactions with businesses and institutions within the bloc through investments and trade, skills and technological transfer.
South Africans should take advantage of the institution, as a tool to bring about the much-needed advancement, and collective economic voice for the Global South and its people.
The Brics bank – also known as the Development Bank – is designed to support economic development among member states. Though initially intended to provide loans to nation-states, it also branches off to financing firms within the block as a measure to advance intra-Brics industrialisation across the region.
President Cyril Ramaphosa at the Brics summit noted the importance of investment plans needed to build a solid intra-Brics economic relations.
Vedanta Zinc International, part of the Vedanta Group of India, is Africa’s largest zinc miner and producer of zinc concentrate. Located in SA with operations in Namibia, it not only mines but also beneficiates locally.
In 2018, at the South Africa’s investment conference, the company pledged over 20% of the total $100-billion investment target in the country. This is huge investment by a single company.
The company is an anchor investor in the Namakwa special economic zone in the Northern Cape where it employs about 4 000 people. Its proposed beneficiation plant, in Gamsberg, Northern Cape, will make it a fully integrated zinc production site, with the mine, concentrator, and refinery complex at a single location, making it the first fully integrated zinc manufacturing facility in South Africa.
Furthermore, as the anchor investor and as part of the $20-billion investment, Vedanta has committed R16-billion in investment to the Gamsberg Zinc Mine and proposed Gamsberg Zinc Smelter, subject to the infrastructure development and incentives framework by the South African government, which will undoubtedly unlock a range of downstream beneficiations for the country and the South Africans.
There are also lessons to be learned. What Vedanta demonstrates is that it does not have to mine and transport the ore to India for processing. Rather, it can set up a beneficiation plant in SA, benefit from other mining infrastructural networks and export either within Brics, in the continent or beyond. The economic spin-offs related to this mining manufacturing investment is boundless, with spin offs beyond fiscal revenues that the governments often look for.
This should also spur local investors to enter India and exploit the many opportunities that exist in the country.
India’s population is large, and the middle class is growing exponentially. With the largest Indian population in the world outside of India, South Africa’s integration with India can be seamless if not natural and can only leap in bounds.
South Africa’s economic strength and influence rely on firms such as Vedanta to serve as catalysts. The more we populate the Brics with more intra-regional investments the more we increase the market power of the block and with that, the economic and political power necessary to further advance the bloc’s common agenda.
The Brics venture is one of the many investment and trade linkages that will increase mutual interests among the member-countries. It will also strengthen economic and political cooperation – and the more these linkages develop, the more the country can create jobs, collectively lift the poor out of poverty and build a prosperous nation the country envisages.
• Phapano Phasha is a researcher and policy maker
