PoliticsNews & AnalysisSouth Africa, the odd BRIC out

Fri,28Nov2014

Posted on Monday, 04 February 2013 15:36

South Africa, the odd BRIC out

By Nicholas Norbrook

BRICS has not proved to be a ring-a-roses for South Africa/Photo©LAN HONGGUANG/XINHUA/SIPA USAChina facilitated South Africa's ascension into the BRICS group – the major emerging economies made up of Brazil, Russia, India and China – in April 2011.

At the time, there was much grand talk about South Africa being a gateway for investors seeking opportunities on the continent.

Andrea Menezes, the chief executive of South African Standard Bank's Brazilian subsidiary, says: "As an investment bank, we are reaching out to Brazilian companies and focusing them on Africa. We are doing the Brazil-Africa relationship."

But this may not be a position that South Africa can exploit for long, according to Rand Merchant Bank country analyst Lucy Corkin.

Recent macroeconomic improvements and growth in African countries mean that "foreign investors are more prepared to set up shop directly on the continent, bypassing South Africa's role as the middle man."

BRIC competitors are proving more of a threat than South Africa might like.

Aside from a World Trade Organisation spat over frozen chicken imports from Brazil, South African manufacturers are ruing the arrival of China.

Chinese imports to Africa increased tenfold over a decade, from $4.1bn in 2001 to $53.3bn in 2011.

A study by East Anglia University in the UK found that South African exports to Africa would have been 10% higher had it not been for Chinese competition.

Politically, this has become a sensitive subject. South African trade minister Rob Davies handed over a list of complaints to his Chinese counterparts on a visit to Beijing in October.

At a meeting of African heads of state in Beijing in July, President Jacob Zuma employed strong language about an unequal and unsustainable trade relationship based on the supply of raw materials● 



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