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Although South Africa was the 31st largest economy in the world, according to 2009 World Bank data, and was the largest economy on the continent, analysts questioned what it could bring to BRIC.
Critics pointed to South Africa’s GDP and annual economic growth, both of which were dwarfed by the performance from other BRICS countries.
However, South Africa has extensive political and commercial clout on the continent and an infrastructure that remains the envy of its neighbours.
“Despite having the continent’s fifth-biggest population, it still has easily its biggest economy, with GDP per head of over $11,000 at purchasing power parity, bigger than China’s or India’s and more than four times the African average,” The Economist wrote in June 2012.
“Its infrastructure is by far the best in Africa. It has 80 percent of the continent’s rail network and is home to the region’s biggest stock exchange. It also has the biggest middle class, proportional to its population, of any African country,” the weekly international journal added.
The greatest nugget, perhaps, is that China is South Africa’s largest trading partner with the latter offering an avenue into the Southern African Development Community Market. China, and Africa’s second largest Asian trading partner, India, believes that BRICS will be able to leverage South Africa’s influence in exploiting the continent’s ever-expanding investment opportunities.
Last week, Xavier Carim, the South African deputy director general at the Department of Trade and Industry, said his country would take the lead in increasing BRICS involvement in developing and cooperating with African economies.
He said that the upcoming fifth annual BRICS Summit in Durban, South Africa would prove the launching pad for enhancing such links.
“The summit theme is BRICS and Africa – a partnership for development, integration and industrialisation,” Carim told the Inter Press Service.
“We want to align our interests to support the integration agenda in Africa, not just to focus on access to resources.”
BRICS heads of state are expected to attend a meeting with the New Partnership for Africa’s Development Steering Committee after the Summit’s conclusion.
Recent studies and statistics support the minister’s enthusiasm.
The IMF predicts that sub-Saharan African economies should have grown by 5 per cent in 2012.
Four of the globe’s 10 fastest-growing economies are in Africa, fueled partly by growing Chinese large-scale investments in areas such as infrastructure and telecommunications.
At the end of 2012, Beijing’s Ministry of Commerce predicted 2013 to be a record year for trade between China and many African nations. The Ministry said that trade in 2012 had surged by 20 per cent with some 2,000 Chinese companies investing in the energy, manufacturing and telecommunications industries on the continent.
The telecommunications industry has been particularly lucrative in recent years.
According to a joint report from the World Bank and the African Development Bank, rapid modernisation and upgrading of information infrastructures in just the past five years has enabled the number of African cellular subscribers to reach 650 million in 2012.
Such a market is bigger than the US or the EU and comes second only to Asia.
The World Bank says that such growth is “quickly changing lives, driving entrepreneurship fueled in part by collaborative technology hubs, and delivering innovation and home-grown solutions for Africa”.
The report expects that Africa will also see an increase in Internet and computer usage, which will nourish a growth in Information and Communication Technology (ICT) innovations.
Current bandwidth growth has also grown by about 2,000 per cent in the past 12 years fueling a corresponding growth in GDP.
Such changes in the ways many Africans lead their lives – particularly with increasing urbanization – has helped develop a new type of local consumerism.
According to McKinsey Africa Consumer Insights Centre, a global management-consulting firm, Africa’s new consumerism has made it a rewarding target for multinational companies.
The firm conducted a study of 13,000 people in 10 African countries and found that the “single-largest business opportunity in Africa will be its rising consumer market” particularly in its apparel, financial services, grocery, and telecommunications sectors.
“Private consumption in Africa is higher than in India or Russia; it rose by $568 billion from 2000 to 2010. From 2012 to 2020, consumer-facing industries are expected to grow a further $410 billion, representing the continent’s largest business opportunity. Apparel consumer goods and food are expected to account for $185 billion or 45 percent of that amount,” the study revealed.
The study goes on to say: “Africa’s consumer facing industries are expected to grow by more than $400 billion by 2020. That would account for more than half the total revenue increase that all businesses are expected to generate in Africa by the end of the decade.”
The recent and projected growth has also piqued BRICS interest in local African media. China, for example, has diversified some of its billions of dollars invested in large-scale infrastructure ventures to engage in media enterprises on the continent.
Last year, Chinese Central Television (CCTV) opened its first foreign broadcast hub in Nairobi, Kenya complementing the 20 bureaus already operated by Xinhua, the state news agency. The 40 Chinese and 70 African journalists working at the CCTV Nairobi office produce an hour of programming every day that focuses on Africa-specific issues.
In the interim, all eyes will be on the Durban Summit at the end of March 2013. South Africa is expected to build on the theme that it is the “strong African Brick in BRICS”.
In a round table address at the University of Stellenbosch last November, South African Deputy Minister Marius Fransman said: “Africa has gone from being the ‘Hopeless Continent’ to being a ‘Rising Star’, the next major growth pole in the world economy.”
“As part of its foreign policy, South Africa promotes the African development agenda,” Fransman said, “and therefore will also in the BRICS context further build on the support solicited at the third and fourth BRICS summits by its partners in support of the African development agenda.”