Africa – BRICS common ground
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PhD in History, Leading Researcher at RAS Institute for African Studies
Ph.D. (History), Institute for African Studies of the Russian Academy of Sciences
BRICS has become widely known across the world. The abbreviation signifies a group of leading regional states seeking to work together to put an end to the monopoly of the West in institutions of global governance. The addition of South Africa has made the bloc even more representative of the union of non-Western powers. However, the role of Africa for BRICS – and the role of BRICS for Africa – is undervalued.
BRICS has become widely known across the world. The abbreviation signifies a group of leading regional states seeking to work together to put an end to the monopoly of the West in institutions of global governance. The addition of South Africa has made the bloc even more representative of the union of non-Western powers. However, the role of Africa for BRICS – and the role of BRICS for Africa – is undervalued.
Africa as a Focus of Attention for BRICS
The value of Africa for BRICS is down to its resource capabilities in the global economy and the political weight it carries in the international arena. It is also a result of a realistic assessment of the continent’s prospects for becoming a driver of global economic development. According to the International Monetary Fund (IMF), the regions that will show the most economic growth in 2015 are China (7.1 per cent), India (6.4 per cent) and West Africa (5.8 per cent). And if China’s economy slows down, West Africa will benefit. While the BRICS countries continue to act as competitors, they are striving towards cooperation. At the 2013 Summit in Durban, the BRICS countries set a new model for financing infrastructure. The 2014 meeting in Fortaleza, Brazil resulted in the creation of the BRICS New Development Bank. And the 2015 Summit in Ufa, Russia is expected to produce the Strategic Economic Cooperation initiative. All this is designed to coordinate the efforts of the BRICS countries, including efforts in Africa.
China as the Main BRICS Actor on the African Continent
China is particularly active in Africa. One of President Xi Jinping’s first official visits was to Africa [1]. This was followed by a visit in 2014 from Premier Li Keqiang. In 2009, China replaced the United States as Africa’s main trading partner [2], with 2013 trade between the two reaching record highs of $210.2 billion [3]. China reset tariffs to zero on 60 per cent of goods from 30 of the least developed African countries. It also promised to make 95 per cent of goods from all of China’s diplomatic partner countries on the continent tariff-free [4].
At the 5th Forum on China–Africa Cooperation (FOCAC) in Beijing in 2012, African countries were promised loans of $20 billion, twice the amount earmarked at the previous Forum in 2009 [5]. In 2014, Li Keqiang announced new loans in the amount of $10 billion [6]. In 2012, a total of 1673 non-investment projects worth $75.4 billion were implemented in 50 countries across the continent, with a focus on infrastructure, energy, education and healthcare.
While the BRICS countries continue to act as competitors, they are striving towards cooperation.
Special Representative on African Affairs of the Chinese Government Zhong Jianhua announced that China had invested $45 billion in Africa in 2012, with $15 billion coming from accumulated foreign direct investments. There are over 2000 Chinese companies operating in Africa [7]. More than 500 infrastructure projects have been completed. During an official visit to Kenya in January 2015, Minister of Foreign Affairs of the People’s Republic of China Wang Yi talked about China’s desire to help Africa realise its dream of building a high-speed railway connecting the continent’s capitals [8]. A 1344-km line has been put into operation in Angola, and the Mombasa–Nairobi–Malabo line connects the markets of Kenya, Uganda and the Democratic Republic of the Congo [9]. The guiding principle here is raw materials in exchange for infrastructure. But it is not just the resource-rich countries that receive investments. The Export-Import Bank of China has allocated $30.7 million to the construction of roads in Kigali (Rwanda) [10], and financed general repairs of the highway leading to Entebbe International Airport in Kampala (Uganda), among other projects [11]. Investments are also being channelled into industry, into high-technology in particular. The construction of a cement plant in Nigeria will help meet the country’s needs in that area [12]. Huawei Technologies provides mobile communications to Kenya, Zimbabwe and Nigeria, while ZetTE has modernised the television and telephone networks across the continent.
Chinese investment offers in Africa
since 2010, 2012
Beijing makes great use of its “soft power” policy. In 2012, around 27,000 African students were attending Chinese universities. In 2013, the number increased to 35,000 [13]. Of these, 12,000 students were on scholarships. In 2014, Dar es Salaam in Tanzania hosted a conference bringing together representatives of 39 Confucius Institutes in Africa [14]. The “African Talents” programme has produced 30,000 specialists. Researcher exchanges and joint research projects are also being carried out.
India Catching Up with China
The second most important partner for Africa from among the BRICS countries is India. In 2012–2013, trade turnover between India and African countries reached $70.25 billion; [15] in 2015, that figure was $90–100 billion [16]. Indian companies generally focus on toil and gas resources. In 2014, the Indian state oil and gas company ONGC Videsh and the Angolan Sonangol signed an agreement on the joint development of oil on the Angolan continental shelf [17]. The country also participates in the development of coal and gas deposits in Mozambique [18]. It is primarily non-state corporations, large and medium-sized businesses that operate on the continent. One such company is Tata Group, whose interests are spread across numerous sectors, including information and communication technologies [19]. India is also stepping up investment in agriculture; African farmers are being taught how to use modern techniques and agricultural technologies; and Indian companies are taking out long-term leases of agricultural land, which is seen as somewhat controversial inside Africa.
. There are over 2000 Chinese companies operating in Africa.
The India–Africa Forum was set up along the lines of China’s FOCAC. Its first Summit was held in New Delhi in 2008, with the second taking place in Addis Ababa in 2011. It was at the Summit in Ethiopia that the Indian side confirmed its earlier promises to introduce a system of duty free goods transport from 34 African countries and set up the Export Import Bank of India with a credit line on $30 billion to finance Indian exports to Africa [20]. In addition, African countries were allocated $5 billion in loans and $700 million to support education and infrastructure programmes.
CII Africa Conclave 2014
India is investing in the development of human potential. In 2012, it announced plans to create more than one hundred research and innovation centres and human resource development institutions – planning and management in education, information technology, etc. The quota for African students studying in India has been increased to 22,000, an Indian–African “virtual university” has been set up as part of the 2008 Pan-African Network Project, with the quota for Indian experts teaching African students using distance learning methods being increased to 10,000 [21].
Brazil Steps up Activity in Africa
Indian companies generally focus on toil and gas resources.
Brazil is also strengthening ties with African countries. An agreement was signed during President Dilma Rousseff’s visit to Nigeria in 2013 on the development of cooperation in agriculture, energy, infrastructure, oil and aviation. The “Year of Brazil” became the guiding theme of the Lagos Black Heritage Festival in October 2013 [22].
Trade volume between Brazil and Africa increased sevenfold in the period from 2002 to 2013, from $4 billion to $28.5 billion [23]. In 2012, Brazil cancelled $900 million of African debt. Africa accounts for 60 per cent of the aid allocated by the Brazilian Cooperation Agency (ABC) [24].
The Brazilian mining giant Vale invested $2.5 billion in Africa in 2012, and has plans to invest another $20 billion over the next five years [25]. Vale has a presence in Angola, the Democratic Republic of the Congo, Gabon, Ghana, Guinea, Liberia, Mozambique, South Africa and Zambia. It runs a coal mining operation in Mozambique that produces 4000 tonnes of coal per hour [26]. Petrobras, which invested a total of $3 billion from 2009 until 2013, operates in 28 countries in Africa, in particular, it has financial interests in oil extraction operations in Angola, Nigeria and Libya. Odebrecht is present in Angola, Libya, Liberia, Mozambique and Ghana and has completed projects in the Republic of the Congo, Botswana, South Africa, Gabon and Djibouti [27].
Cooperation in agriculture is proving to be more and more productive. The Brazilian Agricultural Research Corporation (EMBRAPA), which produces soya, sugar cane, corn and cotton in Tanzania, has opened offices in Ghana, Mali, Mozambique and Senegal. In 2014, EMBRAPA launched the Cotton 4 Project, the aim of which is to increase cotton production in Benin, Burkina Faso, Chad and Mali [28].
India is investing in the development of human potential.
Cooperation in biofuels production is also developing. Brazil was instrumental in the opening of Sudan’s first ever ethanol production facility. Agreements have been signed with Uganda, the Democratic Republic of the Congo, Senegal, Angola, Nigeria and Mozambique. Healthcare is an important area of cooperation. Brazil has allocated $21 million for the construction of a factory that will manufacture antiretroviral medicines in Mozambique, where 10 per cent of the population is infected with the HIV virus [29].
South Africa as a New Player in BRICS
President Zuma welcomes Brazil President
Dilma Rousseff, Durban, 26/03/2013
The Republic of South Africa is also active on the African continent. Speaking at Stellenbosch University in 2012 during a seminar entitled “South Africa – A Strong Building Block for BRICS”, Deputy Minister of International Relations and Cooperation of the Republic of South Africa Marius Fransman said that trade between South Africa and the rest of the BRICS countries increased from $9.2 billion in 2005 to $20.4 billion in 2010 [30], while its trade with Africa in 2011 totalled $30 billion. And although South Africa accounts for just 2.5 per cent of the BRICS’ overall GDP, it is responsible for 11 per cent of BRICS’ trade with Africa [31].
South Africa finances regional organisations, above all, the African Union and the Southern African Development Community (SADC), and provides humanitarian assistance to the least developed countries in the region (South Sudan, Guinea, Rwanda). Five major South African banks finance African projects. The most active of these is the Standard Bank of South Africa Limited. The African Renaissance and International Cooperation Fund provides $45–75 million per year for 10 to 20 projects to be carried out; in particular, it provides assistance to countries that have experienced conflict situations and helps set up elections (the Democratic Republic of the Congo and Sudan, for example) [32]. South Africa is involved in nine major projects across the continent as part of the Presidential Infrastructure Champion Initiative (PICI), fully funding two of them. Its projects include the Dar es Salaam terminal, the Port of Durban and a railway line in Zimbabwe.
Trade volume between Brazil and Africa increased sevenfold in the period from 2002 to 2013, from $4 billion to $28.5 billion.
South Africa is one of the five largest investors in a number of African countries: number one in Mozambique; number three in Nigeria; number four in Ghana and Kenya; and number five in the Democratic Republic of the Congo and Mauritius [33]. Its companies play an important role in the energy, mining and food sectors. Sasol, a major player in the energy and chemical industries, has a presence in Mozambique, Botswana, Gabon and Nigeria. AngloGold Ashanti Ltd., a leading South African gold miner, operates in Ghana, Mali, Namibia and Tanzania [34]. Tiger Brands Limited is involved in the agribusiness in Nigeria, having bought Deli Foods Nigeria in 2011 and a 63.5 per cent share in the Nigerian Dangote Flour Mills in 2012. Telecommunications company MTN Group has operations in 21 countries across Africa and the Middle East. Aspen Pharmacare Holdings Limited has been producing antiretroviral drugs since 2003 and is now a leader on the African ARV market.
Zimbabwean President Robert Mugabe
addresses a media conference after a
meeting with Russian Foreign Affairs
Minister Sergey Lavrov at Mugabe’s
rural home in Zvimba communal lands,
September 16, 2014
Russia’s Role in Africa
Russia’s role in Africa is incommensurate with its capabilities, although it is growing. In 2013, Minister of Foreign Affairs of the Russian Federation Sergey Lavrov visited Algeria, South Africa, Mozambique and Guinea. In 2014, he went to Zimbabwe, where Russia received concessions to develop the world’s third largest platinum deposits. Trade between Russia and the African continent grew seven-and-a-half times from 2000 to 2012, from $1.6 billion to $12.17 billion. Foreign direct investments of Russian companies in Africa were estimated at $8.5–9 billion in 2012 [35]. Among the projects are the LUKOIL development of oilfields in the Gulf of Guinea, the Renova and Evraz manganese and vanadium mining operations in South Africa, Severstal’s iron extraction project in Liberia, ALROSA’s diamond mining activities in Angola, Norilsk Nickel’s nickel operations in Botswana and Rosatom’s uranium mining enterprise in Namibia.
South Africa finances regional organisations, above all, the African Union and the Southern African Development Community (SADC), and provides humanitarian assistance to the least developed countries in the region.
The company Prognoz has developed a statistics portal for the African Development Bank and ten applications for African statistical agencies. In 2011, it produced a software package for Mozambique, and in 2012 it did the same for Rwanda. It has also developed a portal for the Common Market for Eastern and Southern Africa (COMESA) containing the data of 19 member states. According to CEO Dmitriy Andrianov, the company is in a position to “ensure the development of the majority of African countries.” [36] Branches of Russian banks operate across Africa. An agreement has been reached with Russian Railways to construct railway lines in Malawi, and another agreement penned on Russia’s participation in the construction of housing in Western Africa. On 12 March 2015, Moscow hosted the international conference “The Prospects and Possibilities of Business Cooperation between Russia and the West African Economic and Monetary Union”, where Dipton Mineral Resources signed an agreement on carrying out projects in Senegal [37].
Russia has written off $20 billion of African debt. It has also signed “debt-for-development” agreements with a number of countries amounting to a total of $552 million [38]. More than 960 scholarships are offered to African students to study at Russian institutes of higher education every year. Over 6,500 African students are currently studying Russia, half of whom are funded by the Russian government [39].
Russia provides humanitarian aid to Africa. From 2007 to 2013, Africa north of the equator was granted $9.43 million in aid, while Sub-Saharan Africa received $29.5 million over the same period [40]. On 20 April 2014, Russian President Vladimir Putin approved a new Concept of the Russian Federation’s State Policy in the Area of International Development Assistance, which will help cooperation with Africa.
The Competitive Advantages of Each of the BRICS Countries
Russia’s role in Africa is incommensurate with its capabilities, although it is growing.
Each of the BRICS countries has its own advantages in Africa. China leads in trade, aid and investments. Financial opportunities and state support allow Chinese companies to participate in a number of projects – China is the main developer of African infrastructure.
India’s competitive advantages include the development of information technology and the services sector. These are based on the experience of cooperating with African countries in providing technical aid and assistance in training specialists as part of the Indian Technical and Economic Cooperation programme [41].
Indian companies have integrated themselves into African society and the African economy more effectively than their Chinese counterparts, and they are more willing to hire local staff. The presence of large and deeply rooted Indian diaspora in Africa makes it easier for Indian companies and enterprises to find local partners.
Aleksei Vasilyev, Evgeny Korendyasov:
Russian-African relations in
ten years: a new start
Brazil cannot compete with China in terms of finance and investment, but its “fortes” are technical assistance, new technologies and agriculture. Since 2012, the country has conducted a national programme for the development of farming enterprises and is exporting this experience to Africa. Brazil has an advantage in that it has a large diaspora that has historical ties to Africa. As a Portuguese-speaking nation, Brazil retains its historical cultural links with Africa. Brazilian companies actively recruit local staff, which in turn solves labour issues: around 90 per cent of Odebrecht’s employees are from Africa [42], while 85 per cent of Vale’s Mozambique office were recruited locally [43].
South Africa may lag behind the other BRICS countries in terms of economic indicators, but it does have the advantage in terms of its rich resources and strong financial and banking sectors. South Africa is the only country on the continent that has technology of a global standard. It provides African “presence” in BRICS, while at the same time having experience of developing modern economic strategies (the New Partnership for Africa’s Development) and regional economic integration (the Southern African Development Community).
Russia’s advantages lie in the fact that it developed a culture of cooperation with African countries during Soviet times; it was well respected across the continent, which allowed it to establish contacts that have lasted to this day. Russia also has technological capabilities. All this allows Russia to help African countries carry out industrial projects. And Russia’s political weight means it has the right to veto in the United Nations Security Council (as does China).
The presence of BRICS on the continent of Africa creates a balance in relations with its traditional partners; it alters the form and content of external ties and creates new possibilities for African economies.
What does BRICS Mean for Africa?
The presence of BRICS on the continent of Africa creates a balance in relations with its traditional partners; it alters the form and content of external ties and creates new possibilities for African economies. Even Western experts admit that the growth of African countries is largely due to their relations with BRICS. Attention to the needs of the African countries, economic assistance without political conditions, a trade and investment boom and the vigorous protection of the interests of African countries in international organisations – all this has made BRICS an attractive alternative to the West for African nations. Despite the difficulties in achieving its goals, the BRICS group is capable of strengthening cooperation among its member states to further their own interests and the interests of African countries, for which BRICS has become an important donor and investor helping their sustainable development and affording them a more influential place in the world.
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39. Ibid.
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43. Brazil in Africa. A New Atlantic Alliance // The Economist. 48, November10, 2012
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