The Cape Town meeting of the New Development Bank (NDB) beginning this week highlights the benefits of South Africa’s role in global institutions such as the G20 and BRICS+.
Dawie Roodt, the chief economist of the Efficient Group, said the benefits were obvious.
“There are trade and investment opportunities and the opportunity to borrow from the NDB at favourable rates. But there are other benefits as well like the exchange of knowledge and being part of a club with some political influence,” Roodt said.
North-West University Business School economist, Professor Raymond Parsons, said the country must nurture its key trade and supply chain links, encourage positive investment trends, and promote the currency stability that are linked to these relationships.
“South Africa must leverage its membership of the BRICS, the BRICS New Development Bank and the G20 in its economic interests by holding a nuanced balance in its foreign policy between its political preferences and prevailing economic realities,” Parsons said.
“Job-rich growth in South Africa stands to gain from a foreign policy approach designed to maintain trade and investment relations between both the Global North and the Global South, even though there may be different political stances.”
Parsons highlighted that South Africa was a small open economy and must therefore keeping its economic interests high on its foreign policy agenda.
South Africa must nurture its key trade and supply chain links, encourage positive investment trends, and promote the currency stability that are linked to these relationships.
Futurist Chris Adendorff, from Powerhouse Strategies, said South Africa’s membership in the BRICS, the BRICS New Development Bank, and the G20 offers significant potential for economic growth through enhanced trade, investment, infrastructure development, and diplomatic influence.
However, realising this potential requires effective implementation efforts and navigation of both internal and external challenges.
“South Africa’s membership in the BRICS grouping, the BRICS New Development Bank (NDB), and the G20 presents unique opportunities for strategic economic growth. As a minority partner in BRICS, South Africa gains from increased trade and investment opportunities with the other me countries, which collectively represent over 40% of the world’s population and a significant portion of global GDP,” Adendorff said.
“This platform fosters dialogue on economic issues, sharing of best practices, and collaboration on growth-stimulating projects, such as infrastructure development and energy projects.”
In his view, the BRICS New Development Bank, headquartered in Shanghai with an African Regional Centre in Johannesburg, offers South Africa an alternative funding source for infrastructure and sustainable development projects.
This is particularly significant for South Africa as it complements traditional funding sources and can address critical infrastructure needs, which are crucial for our economic growth.
The NDB’s focus on development finance can also help South Africa overcome challenges in attracting private-sector investment due to political and economic uncertainties.
He noted that South Africa’s membership in the G20, comprising the world’s largest economies, was a significant platform for influencing global economic policies and decisions. Through the G20, South Africa can advocate for issues crucial to our economic interests, such as trade reforms, debt relief, and climate finance.
“These engagements align South Africa’s economic strategies with global trends and position us as a gateway for investment into the African continent. By leveraging these memberships, South Africa can aim to attract foreign direct investment, enhance trade relations, and secure funding for critical development projects,” Adendorff added.
“These efforts are vital for South Africa’s economic growth, leading to job creation, improved infrastructure, enhanced education, and increased competitiveness in the global market. Additionally, South Africa’s participation in these forums raises our international profile and contributes to political stability, essential for economic development.”
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