Since May 2010, I have suggested re-coining the term BRICs which, as we all know,
focuses on the economic prowess and growth rates of Brazil, Russia, India,
China and in Africa only South Africa. BRICA
would be more inclusive of the success and influence of other African
nations which are enjoying positive growth rates at 5% or more, larger than South Africa's 2012 estimated 3.5 per cent growth rate, projected to remain similar for 2013.
Botswana, for example, has
maintained a double digit growth rate for the last 10 years; Ghana is still
projected to be the fastest growing economy in the region for 2013 at 8 per cent;
Mozambique, Nigeria, Rwanda, Angola, Tanzania, and Zambia all enjoyed high
single digit growth last year in the 5-7
per cent range, with projections to stay
on course in 2013.
Hence, the “A”
in BRICA would represent these other high-GDP African countries and leave room for
other Africa nations to be included in this new paradigm, or "new think" economic club. These nations will all progress forward, and build strategic alliances without the traditional "developed" world. This is a good thing, and "developed" nations, particularly the U.S., need to pay more attention. Economic alliances do breed political and strategic ones; thus, on future geo-political issues the U.S. could get left out in the cold on issues where the BRICS might align.
A Lesson in Strategic Long-Term Planning:
In the U.S., we do not pay enough attention to long-term strategic planning; China on the other hand does, with new President Xi Jinping not missing a beat on his first foreign trip -- including not one, but three African stops. It would also seem that Russia and Brazil get the doctrine of building long term country friendships in Africa better than we do. The U.S. is coming to the party late in building long term strategic economic relationships with Africa. We are doing better, but are not where we should be. The juxtaposition of having a group White House meeting for four African nations when the BRICS Summit was going on seemed a bit incongruous.
The
just concluded 5th BRICS Summit in Durban, South Africa, achieved its goal by further spotlighting the economic importance of the Africa region. Media and institutions from The Economist and Financial Times, to McKinsey have talked about
Africa’s Rising
economic leadership, especially when the rest of world is struggling - Europe's non-recovery and America's snail-paced one. But as we
enter 2013, let’s recap the headline: 7 of the world’s 10 fastest growing economies
are in Sub Saharan Africa (SSAfrica).
In addition to all the presidents of BRICS countries
attending, 15 African Heads of
State also where in Durban. In case you missed it, here are some of the "new think" paradigm shifting key factoids out of the Durban reported by France 24, CCTV, and Al Jazeera during the 4-day event:
BRICS Represent:
ü 25
per cent of FDI from Russia, China and
India goes to Africa;
ü 25
per cent of the world’s economy/GDP;
ü 17
per cent of global trade;
ü 50
per cent of global economic growth;
ü $200
billion trade value amongst them.
BRICS Initiatives:
ü BRICS
are creating a Development Bank focused on
infrastructure, with a common currency pool to assist with development and
loans as an alternative to the IMF and other international financial institutions; where the Banks HQ is going to be remains undecided;
ü BRICS
Development Bank would seek to have $100 billion in capitalization;
ü China
to give Africa 20 billion in loans over next few years;
ü BRICS
Business Council and BRICS Think Tank efforts further developed; and,
ü China
and Brazil discuss a $30 million currency swap.
On top of the BRICS-related news, the average 2012 collective growth rate for SSAfrica is hovering between 5.8-7 per cent with the The Economist and World Bank forecasting this to be the case for the Region for the next 20 years. Banks on the Continent are also improving their macroeconomic picture with many of them making the 2013 Best Emerging Market Bank list of Global Finance Magazine, as they have improved their asset growth, profitability, strategic relationships, customer service, competitive pricing, and innovative products. For the Region, Nigeria’s ECO Bank is being hailed as the winner for the upcoming 2013 awards event.
Lean Forward: What's Next:
Of course the watch words are what is next and how will Sub-Saharan Africa's proposed economic prowess trickle down to reach its most poor. Resources in the proposed BRICS Development Bank slated for Africa's infrastructure, agriculture, and education will need to actually reach and change the quality of life of the intended, and impact the most needy. Although the BRICS positive economic news is top of the line, we cannot lose sight of some of the staggering SSAfrica demographics:
- 1.5 billion people continue to live on $1.25 to $2.00 per day;
- 2.7 in 2011 to 2.8% in 2012 per capita rates - a small increase, when UN notes minimum rate needs to be 3% per capita just to inch above the poverty line;
- 133 million young people in the Region who cannot read;
- 239 million in sub-Saharan Africa go hungry daily; 26 per cent of this figure are children says 2011 World Hunger and Poverty Facts;
- 8.2 million children in West Africa are affected by food security or are malnourished;
- 4 of the top countries on the world list of nations with the largest economic income disparities and inequities amongst their population are in SSAfrica - Namibia, Botswana, Lesotho, and South Africa; South Africa reportedly has the highest income disparity in the world according to CCTV;
- 1 in 4 Africans only have access to electricity, and intra-African trade is only about 10 per cent of total exports;
- 5 countries in SSAfrica where mid-ranked on the 2012 Transparency International’s (TI) Corruption Index (Botswana, Cape Verde, Mauritius, Rwanda, and the Seychelles); not a lot given that there are 48 countries; the rest of the countries fell below 50 per cent on 100 point upward scale;
- 30% of the region has paved roads or working railways, a very low percentage given the Region's vast size.
- 9-10 of the Region's countries, I would put on the political concern list because of either insecurity or governance issues (Mali, Central Africa Republic, the two Sudans, Eastern DRC, Guinea Bissau, Somalia, Cote d'Ivoire, and parts of Northeastern Nigeria; Kenya's post-election uncertainity could add it to the list).
This is by no means an exhaustive list, but it helps keep things in perspective for the challenges, we all hope the BRICS (or BRICA) resources will address. These are also the areas that need more focus and resources from the "developed world," if it wants to remain viable as the BRICS nation lean forward with their "new think" paradigm on how to do things and how to get things done.
