As the world economic powers try to figure out how to get their slice of the money-making opportunities that are exploding in Africa, the so-called BRICS nations — Brazil, Russia, India and China — will meet next month in Durban, the busy port city of their newest member, South Africa. Under discussion will be how to best exploit the opportunities on the continent.
At the landmark conference, South Africa will try to maximize its role as the facilitator to the BRICS nations moving into the African market. At this fifth annual summit, the African Union has been invited to participate for the first time, which is seen as a prime opportunity for the African states to directly lobby the BRICS nations to invest in their economies.
“Africa is the fastest growing power after Asia and offers the highest returns on investments of any region,” said Collins Chabane, South African minister for Performance Monitoring, Evaluation and Administration. “The African continent constitutes 60 percent of the world’s unused arable agricultural land. In 2010, six of the world’s fastest growing economies emanated from Africa, and Africa’s output is expected to expand by 50 percent over the next four years. Economic growth is expected to expand by an average of 5.5 percent annually in the next five years.”
But South Africa’s place as the middleman for investors interested in Africa may be endangered by some nations, such as China, that prefer to deal directly with the other African countries.
The 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 middleman,” Rand Merchant Bank country analyst Lucy Corkin told Africa Report.
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Chinese imports to Africa have grown exponentially, increasing tenfold between 2001 and 2011 — from $4.1 billion at the start of the decade to $53.3 billion in 2011.
East Anglia University in the U.K. released a study that found South African exports to the rest of Africa would have been 10 percent higher if not for the competition from Chinese imports.
But Xavier Carim, deputy director general at South Africa’s Department of Trade and Industry, told the website, The New Age, that the country plays a crucial role in the BRICS consortium.
“South Africa can offer its Brics partners better access to the mineral-rich African continent and hence plays not just a national role, but a continental one, in the Brics,” he said.