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South Africa’s comparative advantage within BRICS pertains to South Africa’s considerable non-energy in situ mineral wealth. In a recent report commissioned by the United States (US) based Citigroup bank, South Africa was ranked as the world’s richest country in terms of its mineral reserves, worth an estimated $2.5 trillion.
South Africa is the world’s largest producer of platinum, chrome, vanadium and manganese, the third-largest gold miner, and offers highly sophisticated mining-related professional services, contributing significantly to the BRICS resource pool.
South Africa is investing R300 billion ($35.6 billion) into expanding and improving its railways, ports and fuel pipelines, as a catalyst to help unlock the world’s greatest mineral wealth.
Africa will also continue to be buoyed by the exploding global demand for oil, metals, minerals, food, and other natural resources. Likewise, the African continent, which is arguably one of the world’s largest unexplored resource basins, has abundance of riches; including 10 per cent of the world’s oil reserves, 40 per cent of its gold ore and 95 per cent of platinum.
The demand from BRICS countries for these commodities has been a critical source to support growth on the continent.
South Africa’s financial market development and sophistication, also as a source of exceptionally sophisticated professional services and financial expertise, is globally recognised. The 2011/12 World Economic Forum’s Global Competitiveness Index displayed a high level of confidence in its financial market development, ranking us in fourth place globally on this measure.
The regulation of the Johannesburg Stock Exchange was ranked number one in the world, as was the strength of South Africa’s auditing and reporting standards.
Additionally, South Africa is ranked second for both the soundness of banks and the efficacy of corporate boards.
South Africa’s excellence in science, technology and innovation is also recognized; for example, it was awarded the majority stake in hosting the Square Kilometre Array – the world’s largest and most sensitive radio telescope once it is completed. BRICS countries supported South Africa in obtaining the majority stake.
South Africa’s export structure to BRICS member countries shows significant diversification and the negative trade balance has also narrowed over the last four years – from R57 billion in 2008 to R22.8 billion in 2011.
South Africa’s export trade with the BRIC partners has grown from 6.2 per cent of the total in 2005 to 16.8 per cent in 2011; whereas its imports from the BRIC countries represented 13.6 per cent of total imports in 2005 and 20 per cent in 2011. The Minister of Trade and Industry, Rob Davies, has emphasised that last year alone, trade between South Africa and BRICS countries grew by 29 per cent.
According to Standard Bank, BRICS–Africa trade will increase threefold, from $150 billion in 2010 to $530 billion in 2015. Between 2010 and 2015, BRICS’ share of Africa’s total trade will increase from one-fifth to one-third and BRICS FDI stock in Africa will swell from around $60 billion in 2009 to more than $150 billion by 2015.
Today, the BRICS countries are the largest investors in the continent.
While South Africa’s share was not absorbed into these projections at the time, South Africa’s trade with Africa accounts for 17 per cent of total trade, 21 per cent of outward investment and when broken down, 14 per cent of total exports to the world; and around 24 per cent when including the Southern African Customs Union.
Furthermore, South Africa enjoys recognition as a dedicated and committed global and regional player. South Africa’s constructive role in global governance structures as well as its position within organisations of the South, notably the African Union (AU), the Group of G77 (G77) and China and Non-Aligned Movement is appreciated by BRICS and other like-minded partners.
South Africa is also the only African country represented in the G20, which has become an important institution on the reform of the financial and economic global governance architecture.