Latest news with #BRICS-backed
IOL News
8 hours ago
- Business
- IOL News
BRICS+ Series: Africa Embraces Financial Alternatives Through BRICS De-dollarisation
BRICS' de-dollarisation strategy aims to reshape Africa's financial landscape, potentially liberating the continent from dollar dependency and fostering economic independence. Image: / BRICS nations are accelerating de-dollarisation, reducing reliance on the US dollar in global trade and finance. This push for a new financial architecture, promoting local currencies and alternative payment systems, was spurred by the Ukraine conflict and Western sanctions. For example, over 80% of Russia-China trade in 2023 bypassed the dollar, using yuan and ruble. Launched in 2024, the BRICS Bridge Payment System offers an alternative to SWIFT, facilitating cross-border transactions in local currencies. By mid-2025, pilot testing was underway between China, Russia, and India, with South Africa and Egypt recently joining. This emerging system raises the question of whether it can free Africa from its long-standing reliance on the dollar. The dollar's costing Africa Africa's financial susceptibility to the US dollar is deeply rooted in both its structure and history. Over 60% of the continent's external debt is denominated in US dollars. In 2024, African nations spent an estimated $70 billion on debt servicing, a figure significantly inflated by rising US interest rates and a strong dollar, according to the African Development Bank. This substantial financial strain diverts crucial funds from vital sectors such as development, education, and healthcare. Furthermore, dollar dependency exacerbates external vulnerabilities, as evidenced by trade imbalances. Nigeria, Africa's largest oil producer, consistently struggles with dollar shortages, currency devaluations, and inflation. This is because while its oil exports are priced in dollars, the majority of its imported goods are also dollar-denominated, creating a persistent economic challenge. Video Player is loading. 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Advertisement Next Stay Close ✕ BRICS and the promise of monetary sovereignty African nations may regain monetary sovereignty through the de-dollarisation agenda. By trading in local currencies or a BRICS-backed settlement currency, they could mitigate exposure to dollar volatility. With intra-BRICS trade rapidly expanding to $422 billion in 2023, African BRICS members are well-positioned to leverage this transition. Several nations are increasingly adopting local currency trade to alleviate pressure on their foreign reserves. For example, Egypt entered a $2.5 billion bilateral currency swap agreement with China in late 2024, enabling it to use yuan for Chinese imports and thereby conserve its foreign exchange. Similarly, Ethiopia, grappling with persistent dollar shortages and a trade deficit exceeding $10 billion, is looking into conducting local currency trade with India, a significant exporter of pharmaceuticals and engineering products. As Africa's most industrialised economy, South Africa plays a crucial role in BRICS' financial integration initiatives. Its banking sector is currently testing cross-border settlements through the BRICS Bridge Payment System. By conducting a portion of its trade with China, Russia, and India in currencies other than the dollar, South Africa aims to protect itself from global monetary instability. A cautious road to financial independence De-dollarisation alone cannot solve all economic challenges. Many African currencies lack the necessary stability and liquidity for efficient trade, as seen with the persistent inflation and foreign exchange volatility of the Nigerian naira and Ethiopian birr amongst others. True monetary independence will remain elusive until domestic economies are strengthened and confidence in local institutions is re-established. To prevent a new form of dependency, African nations should prioritise diversifying their trade relationships, strengthening regional economic ties, and establishing strong financial governance. Building regional capacity BRICS provides African nations with significant leverage, offering them a crucial role in reshaping global financial regulations. To truly achieve liberation, however, African states must seize this opportunity to establish autonomous institutions. The African Continental Free Trade Area (AfCFTA), when integrated with BRICS mechanisms, can foster increased intra-African trade using local currencies. Furthermore, the Pan-African Payment and Settlement System (PAPSS) by the African Export-Import Bank, introduced in 2022, can work in conjunction with BRICS infrastructure to lessen the continent's reliance on the US dollar. Uganda and Nigeria are engaging with BRICS-related initiatives, signaling a shift away from dollar-denominated transactions. Uganda, while not a full BRICS member, signed a 2025 memorandum with India to investigate using the rupee for agro-processing imports, which would alleviate pressure on its dollar reserves. Nigeria is exploring membership in the BRICS Bank (NDB), aiming to access non-dollar loans that could finance energy infrastructure and mitigate foreign exchange risks. Liberation lies in leverage, not replacement BRICS' de-dollarisation strategy offers Africa a unique opportunity to redefine its position within the global financial system. It provides mechanisms, alternatives, and partnerships to lessen the dominance of the dollar. However, this strategy alone cannot secure Africa's financial independence. Achieving this liberation requires robust institutions, prudent macroeconomic policies, and unified regional cooperation. Instead of merely shifting its allegiance from Washington to Beijing, Africa must assert its independence. While BRICS can provide the framework, Africa itself must undertake the construction. Written By: Dr Iqbal Survé Past chairman of the BRICS Business Council and co-chairman of the BRICS Media Forum and the BRNN *Sesona Mdlokovana Associate at BRICS+ Consulting Group African Specialist ** MORE ARTICLES ON OUR WEBSITE ** Follow @brics_daily on X/Twitter & @brics_daily on Instagram for daily BRICS+ updates
Miami Herald
05-07-2025
- Business
- Miami Herald
BRICS countries set to criticize U.S. tariffs
July 5 (UPI) -- The so-called BRICS group of countries is reportedly set to issue a formal statement criticizing the United States current tariff situation when the group meets for a two-day summit in Brazil. Brazil, India, Russia, China, South Africa and the other five countries that comprise the intergovernmental organization, are expected to adopt a position of "serious concern" regarding U.S. President Donald Trump's enactment of so-called reciprocal tariffs, Bloomberg reports, citing sources familiar with ongoing deliberations. Leaders of the BRICS countries are in Rio de Janeiro for the group's 17th summit which begins Sunday and is being hosted by Brazilian President Luiz Inacio Lula da Silva. Brazil currently holds the BRICS chair position and counts the United States as its second-biggest trading partner after China. Earlier in the week, Trump confirmed U.S. tariffs will begin July 9 when a 90-day pause is scheduled to end. The president has previously been at odds with the organization. After winning the election last year and before taking office, Trump said the group would "wave goodbye to America" if it created its own currency, adding he would also impose a 100% tariff in U.S. domestic markets if that scenario unfolded. In 2023, BRICS formally invited Saudi Arabia and Iran to join the organization. Iran became the group's latest member last year. Last month, BRICS issued a statement on the U.S. bombing of Iranian nuclear facilities, using the same "grave concern" language. The organization continues its recruiting attempts. Last month, Colombia announced it would become a member of the BRICS-backed New Development Bank as the country looks to distance itself from its reliance on Western financial markets. Copyright 2025 UPI News Corporation. All Rights Reserved.
UPI
05-07-2025
- Business
- UPI
BRICS countries set to criticize U.S. tariffs
1 of 2 | The so-called BRICS group of countries is reportedly set to issue a formal statement criticizing the United States current tariff situation, when the group meets for a two-day summit in Brazil, hosted by President Luiz Inacio Lula da Silva. File Photo by John Angelillo/UPI | License Photo July 5 (UPI) -- The so-called BRICS group of countries is reportedly set to issue a formal statement criticizing the United States current tariff situation when the group meets for a two-day summit in Brazil. Brazil, India, Russia, China, South Africa and the other five countries that comprise the intergovernmental organization, are expected to adopt a position of "serious concern" regarding U.S. President Donald Trump's enactment of so-called reciprocal tariffs, Bloomberg reports, citing sources familiar with ongoing deliberations. Leaders of the BRICS countries are in Rio de Janeiro for the group's 17th summit which begins Sunday and is being hosted by Brazilian President Luiz Inacio Lula da Silva. Brazil currently holds the BRICS chair position and counts the United States as its second-biggest trading partner after China. Earlier in the week, Trump confirmed U.S. tariffs will begin July 9 when a 90-day pause is scheduled to end. The president has previously been at odds with the organization. After winning the election last year and before taking office, Trump said the group would "wave goodbye to America" if it created its own currency, adding he would also impose a 100% tariff in U.S. domestic markets if that scenario unfolded. In 2023, BRICS formally invited Saudi Arabia and Iran to join the organization. Iran became the group's latest member last year. Last month, BRICS issued a statement on the U.S. bombing of Iranian nuclear facilities, using the same "grave concern" language. The organization continues its recruiting attempts. Last month, Colombia announced it would become a member of the BRICS-backed New Development Bank as the country looks to distance itself from its reliance on Western financial markets.
UPI
20-06-2025
- Business
- UPI
Colombia joins BRICS-backed bank in shift toward new financial order
June 20 (UPI) -- Colombia's recent entry into the BRICS-backed New Development Bank marks a significant shift in its foreign and economic policy. With the move, President Gustavo Petro's administration aims to reduce the country's long-standing reliance on Western financing and attract new investment for strategic infrastructure projects. "Colombia officially joins the BRICS New Development Bank. This membership opens new financing opportunities for strategic projects and is a key step toward diversifying alliances and strengthening the country's economy," the Colombian presidency announced Thursday in a post on X. Colombia's membership involves an initial $512 million commitment and makes it the first South American nation to formally join the bank, which is backed by 11 BRICS full members, including China, Russia, India, South Africa and Brazil. Foreign Minister Laura Sarabia welcomed the announcement, saying the move goes beyond financial strategy and reflects broader national goals. "We continue to pave the way for new opportunities for the country," she wrote on X. Beyond access to loans with fewer conditions, the move carries significant symbolic weight. It reflects the Petro administration's interest in redefining Colombia's international role, shifting away from the traditional Washington-Bogotá axis to pursue a more independent path aligned with the Global South. The announcement has sparked both enthusiasm and skepticism among Colombian analysts, who warn of financial risks, geopolitical consequences and the delicate balance Bogotá must maintain with the United States, its primary trading and military partner. The Petro government has defended the move as a pragmatic step amid global economic volatility and the weakening of the traditional multilateral order. Officials also see it as an opportunity to advance strategic projects such as the interoceanic railway -- an ambitious infrastructure initiative aimed at positioning Colombia as a commercial hub between Asia and the Caribbean. Colombia's Foreign Ministry and Finance Ministry officials emphasized that joining the New Development Bank does not signal a break with the Inter-American Development Bank or the International Monetary Fund. "This is about having more options, not replacing allies," Finance Minister Ricardo Bonilla said. Still, reactions in Colombia remain divided. While lawmakers from the ruling coalition praised what they called the country's "financial emancipation," opposition groups and business associations raised concerns about the fiscal burden and reputational risks of aligning with a bloc that includes China and Russia. "Do we want to depend on the yuan or the ruble? What guarantees does a bank dominated by authoritarian regimes offer?" conservative senator and former presidential candidate Enrique Gómez asked. Colombia has long been one of the United States' closest allies in the fight against drug trafficking and in supporting the liberal economic model promoted by Washington. Against that backdrop, closer ties with China have raised tensions. The U.S. State Department has said it will firmly oppose financing for Latin American projects tied to China's Belt and Road Initiative, a global investment strategy backed by Beijing that aims to expand its economic influence through critical infrastructure development around the world. Founded in 2015, the New Development Bank aims to provide financing for infrastructure and sustainable development in emerging economies, with fewer political conditions than the International Monetary Fund or the World Bank. To date, it has approved more than $40 billion in funding for 122 infrastructure projects in sectors such as transportation, clean energy and sanitation.
Hindustan Times
24-05-2025
- Business
- Hindustan Times
BRICS gets more powerful despite Trump's bloc ‘Dead' declaration Algeria
Algeria has officially joined the BRICS-backed New Development Bank (NDB), marking a major expansion of the bank's influence into North Africa and further accelerating the BRICS bloc's push to provide an alternative to Western-dominated financial institutions. The accession was finalized on May 22, 2025, with NDB President Dilma Rousseff congratulating Algeria and highlighting its vital role in both the Northern African and global economies. Watch for more
