It's been over a decade since Brazil, Russia, India, China and South Africa united to formalise their commitment to reshaping the global political and economic structures and balance.

South Africa joined in 2010 and 13 years later, at the 2023 BRICS Summit, the emerging market group of countries highlighted the progress made towards their guiding principles. According to the BRICS Investment Report, BRICS now forms one of the world’s most important economic blocs, overtaking the G7 with a global share of 31.5% of global GDP (compared with the G7’s 30.07%) by the end of 2022.

The big BRICS winners

While figures vary according to different institutions, South Africa and China appear to be the biggest winners when it comes to trade within the BRICS nations. China stands out as the dominant trading partner, with its share representing at least 70% of the total trade of the bloc.

Challenges remain to develop further trade with South Africa’s other BRICS partners – Brazil, India and Russia. Russia’s war against Ukraine has significantly disrupted global trade dynamics, while India’s recent decision to halt exports of non-white basmati rice (prioritising its own food security) has increased rice prices in markets like South Africa. These trade issues were not openly discussed at the BRICS Summit forum.

South Africa’s total trade with its BRICS partners increased from R487 billion in 2017 to R830 billion in 2022. BRICS economies accounted for about 21.3% of South Africa’s total trade in 2022.

South Africa has typically exported primary products to its BRICS partners in the form of raw materials from the minerals and agricultural sector. However, there remains an opportunity for increased export of finished goods, especially in the services trade or the trade of intangible products. A 2022 trade report estimated that South Africa’s services trade with BRICS nations stood at 12% compared to 43% with European nations.

BRICS+: economics, trade and politics

The headline announcement at the 2023 BRICS Summit was the decision to add more countries to the group. Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the UAE have been invited to join BRICS from 1 January 2024.

The purpose behind the expansion of BRICS remains unclear. Countries like Iran, Saudi Arabia and the UAE (all major oil and gas exporters) are unmistakable strategic trade partners that could boost growth for the cooperative forum of influential nations. The inclusion of some others is something of a mystery.

For example, Argentina’s economy is currently facing an inflation rate above 100% and poverty hovering close to 40%. Argentina also recently sought $44.5 billion in financial assistance from the IMF.

The decision to include Ethiopia and Egypt has been well received, though questions have emerged regarding the exclusion of Nigeria (Africa’s largest economy) and other regional players like Rwanda and Kenya.

Strategic de-dollarisation, but where’s the BRICS currency?

The expanded BRICS group will account for almost 42% of crude-oil output globally. Such a grouping may opt to trade in currencies other than the US dollar.

The idea of a single BRICS currency was floated prior to the 2023 summit, with Brazilian President Luiz Inácio Lula da Silva suggesting it could reduce the group’s vulnerability to exchange-rate fluctuations.

However, in a statement released after the BRICS Summit in Johannesburg, President Cyril Ramaphosa noted: “As BRICS, we are ready to explore opportunities for improving the stability, reliability and fairness of the global financial architecture. The summit agreed to task the BRICS Finance Ministers and/or Central Bank Governors, as appropriate, to consider the issue of local currencies, payment instruments and platforms and report back to the BRICS leaders by the next summit.”

This would likely be a lengthy and cumbersome exercise. The alignment of regulation, currency controls and policy between all BRICS parties would prove to be challenging.

Certainly, a new global order led by BRICS+ nations is looming with good intentions to support other developing countries. This year’s summit has already sparked debates about how it might change world politics and how Western nations will react to these shifts in trade and economics. However, South Africa remains clear on its positioning that it remains open to trade relations with all nations and regions – including those in the East and West.

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