The fifteenth BRICS summit that was held in Johannesburg in August this year has been regarded by most analysts as epochal in both geo-economic and geo-political terms. As of 2023, the economic weight of the initial five nations in GDP terms has already surpassed that of the G7 which is made up of the world’s largest developed economies.
The entry of the six new members into BRICS makes this intergovernmental partnership the ultimate global power block in both political and economic terms but will ordinary South Africans, both in juristic and non juristic terms take heed of the opportunities presented?
South Africa’s influence as a BRICS partner signals an opportunity for ordinary South Africans to collectively increase their interactions with businesses and institutions from the bloc through investments and trade, skills, and technological transfer which can help increase the standards of living, promote unity, and common interests and knowledge governance models.
While political structures that must pull this BRICS nation as a political force are not yet in place, economic institutions, while still relatively young, are commanding significant interest and clout. For most BRICS peoples and businesses, the institutions should be the alternatives necessary to bring about the much-needed advancement, and the collective economic voice on the global stage.
Conspicuous among such institutions is the BRICS bank, better known as the New Development Bank. At the core of its mandate is to support economic development among member states. Though initially intended to provide loans to nation-states, it is now branching off to financing firms within the block and the developing world. This is certainly to advance intra-BRICS industrialisation, building of the value chains, and facilitate opportunity maximisation (trade and investment) across the region.
It is here that we find some companies amongst the BRICS countries that have taken advantage of South Africa’s investment call made by President Ramaphosa at the BRICS Summit. The list of such firms is long but it is worth mentioning one as an example of how its investment plans exemplify the needed approach to building 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 South Africa but also with an operation in nearby Namibia, it not only mines but also beneficiates locally. In 2018, at South Africa’s investment Conference, it pledged just over 20% of the total $100bn investment target in the country. This is a large investment by a single company.
It is an anchor investor in the Namakwa Special Economic Zone in the Northern Cape where it employs roughly four thousand people. Its proposed beneficiation plant, also at the Northern Cape in Gamsberg, 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 South Africans.
There are also lessons to be learned. What Vedanta is demonstrating is that it does not have to mine and transport the ore to India for processing. Rather, it can set up a beneficiation shop in South Africa, benefit from other mining infrastructural networks, and export either within BRICS, in the continent, or beyond. The economic spinoffs related to this mining manufacturing investment are boundless, with spinoffs beyond fiscal revenues that governments often look for.
This should also spur South African investors to enter India and exploit the many opportunities there. 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 power and influence rely on firms like Vedanta to be the catalysts. The more we populate the BRICS with more intra-regional investments the more we increase the market power of the block and with it, the economic and political power necessary to further advance our common agendas.
This BRICS venture is one of the many such BRICS investment and trade linkages that South Africa has attracted which will surely increase mutual interests among the BRICS members but also strengthen economic and political cooperation.
Similar ventures are many among other BRICS countries. What is exciting is that the more these linkages develop, the more we can create jobs, collectively lift the poor out of poverty, and build a prosperous nation that we all envisage.
Phapano Phasha is a Researcher and Policymaker.
