MAGDA WIERZYCKA: The ‘s’ in Brics is a country, not a plural letter

I recently spoke at the Saudi Arabia Future Investment Initiative (FII) conference in Miami — can I brag about debating former US secretary of state Mike Pompeo and former Italian prime minister Matteo Renzi?

The conference attracted some of the most well-known “celebrity” speakers, including former US treasury secretary Larry Summers.

Most panels focused on investment, but there was some variety, such as actor Rob Lowe (whose poster decorated my bedroom wall when I was 15 years old) talking about his career and his executive production collaboration with Netflix.

One of the panels, comprising heads of global investment firms, tackled the topic of investments in 2024. A speaker noted they should not forget the Brics alliance of Brazil, Russia, India and China. He repeated this a number of times before I realised that he really believed the “S” in Brics merely indicated the plural form. This error shaped the opening remarks of my own speech, which focused on why the world should not ignore Africa.

Africa remains the forgotten continent despite being home to about 30% of the world’s mineral reserves, including 40% of its gold and 90% of its chromium and platinum (according to the UN Environment Programme). It also has the youngest and fastest-growing population in the world — projections show that by 2100, 41% of the world’s youth will be African. This is, of course, both a commercial opportunity and a job challenge.

On the negative side, the continent is disproportionately affected by climate change despite contributing less than 3% to global emissions, and it is being left behind in terms of technology, infrastructure development and financing.

For the developed world, engagement with Africa has been disappointing. China’s $1-trillion Belt and Road global infrastructure initiative led to Chinese bailouts of 128 projects in 22 African countries, becoming their “lender of last resort” — with lending increasing fourfold since before 2000.

The US’s African Growth and Opportunity Act (Agoa), signed in 2000, allows 35 countries to export certain products to US tariff-free but has been poorly used. Of these 35 countries, almost half have a utilisation rate of less than 2%; that is 98% of US imports from those countries are still subject to tariffs.

While Agoa is often described as the sword that the US holds over SA, being removed from it would have a marginal impact, with a Brookings model suggesting that South African exports to the US would fall by about 2.7% and GDP decline by 0.06%.

This is because non-preferential average tariffs to the US remain below 5% for most products, which is not much of a saving, and over 50% of South African exports to the US, such as the minerals and metals sector, do not qualify for lower tariffs.

In fact, the impact on the US would be more significant, as the US imports 98% of its chromium and 25% of its manganese, titanium and platinum from SA. 

Despite earlier failures, can the world’s democratic superpowers afford to ignore Africa? In addition to its metals and minerals, Western companies will need access to Africa’s growing population. And if not addressed, it is estimated that 1.2-billion climate refugees will be heading north by 2050.

Less benevolent superpowers are hedging their bets as Brics prepares to admit six new countries — Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the UAE — and form the New Development Bank. And yet SA remains a mere plural letter in the eyes of the world’s investors.

This article was sponsored by Sygnia Ltd.