African Countries Moving Away from Dollar-Based System by joining BRICS: Experts

For Africa, the use of the dollar in trade means that countries have no chance to trade with each other in local currencies, Elizabeth Rossiello, Chief Executive Officer of the Kenyan financial company AZA Finance, said.

African nations are looking for new ways to raise money as global financial entities, such as the World Bank (WB), fail to give enough attention to the continent, she stressed.

BRICS is also attractive to developing countries because it can act as a buffer from US sanctions, Steve Hanke, a professor of applied economics at Johns Hopkins University, said.

The countries of the global South see the association as a counterweight to the US-dominated global financial system, the analyst added, TASS reported.

That said, a number of experts note that the expansion of BRICS will not lead to the fragmentation of the global economy. Adam Slater, lead economist for the Oxford Economics company, believes that the integration’s total share in global trade stands at a mere 3%. Meanwhile, former employee at the White House and the World Bank Harry Broadman thinks that joining BRICS has more of a political and symbolic meaning, not economic.

The BRICS group, established in 2006, first expanded in 2011, when South Africa joined the four founding nations of Brazil, Russia, India and China. The decision to invite six more countries to join BRICS was made at the group’s summit in Johannesburg in August 2023.

However, Argentina declined the invitation to join in late December. Five new members (Egypt, Iran, the United Arab Emirates, Saudi Arabia and Ethiopia) formally became full-fledged members of the BRICS group on January 1 this year. Russia assumed BRICS’ one-year rotating chairmanship on the same day.