Analysts Respond As Nigeria Partners BRICS After Half Year’s $1.27bn Foreign Investment

Nigeria recently joined BRICS as a partner country, following a surge in foreign direct investment. BRICS, an alliance of Brazil, Russia, India, China, and South Africa, was established in 2009 to promote economic, political, and cultural cooperation among its members, representing around 40% of the global population and nearly a quarter of GDP. The bloc aims to reduce dependence on Western financial systems and advocate for fair global governance. In this article, News Editor, National Wire, DAYO EMMANUEL examines the implications of Nigeria’s new economic partnership and its potential impact on a struggling economy. He reports.

It is no longer news that Nigeria has joined BRICS as a partner country, but analysts have started discussing the implications.

Nigeria’s economic landscape saw a significant shift as the country officially got involved with BRICS, enhancing strategic ties with the influential international alliance.

This partnership, along with twelve other nations, was formalized at the recent BRICS summit in Kazan, Russia, held from 22nd – 24th October, 2024. The move aligns with a growing influx of foreign capital into Nigeria, reinforcing its role as an emerging global economic player.

Foreign Capital Inflows Rise Compared to January to June 2023

The timing of Nigeria’s BRICS partnership coincides with a remarkable increase in foreign capital inflows from BRICS countries despite a challenging economic period.

During the first half of 2024, foreign capital inflows from BRICS members surged by 189%, reaching $1.27 billion—up from $438.72 million in the same period of 2023. This growth reflects heightened interest in Nigeria’s economic potential and underscores its commitment to forming international partnerships for shared growth.

Mixed Reactions from Nigerians

Many Nigerians have shared varied perspectives on this development, weighing the potential benefits against possible drawbacks.

Kayode Akinrimisi, Director of Lagos-based GCOMS Ventures, voiced his support, criticizing Western economic policies as exploitative. “Since 1960, Western nations have extracted trillions from the Global South,” he said, noting that countries like France and Spain continue to benefit economically from former colonies. Akinrimisi emphasized that BRICS provides an alternative to Western-dominated trade systems by promoting trade in local currencies and reducing dependence on the dollar.

Kehinde Adegoke, award-winning journalist and public affairs analyst, and Executive Editor of The Digger News published by Conglomedia Consult Limited, Ibadan, Nigeria, shared his view. “The main advantages of BRICS ETFs include diversification, access to rapidly growing economies, and the potential for higher long-term returns compared to developed markets.”

He further observed the risk involved: “However, they also come with greater risks. Higher volatility can arise due to factors like political instability, slower growth, and currency fluctuations. Additionally, BRICS countries face challenges such as corruption, infrastructure deficits, and the need for economic reforms.”

Summing up his points, Adegoke noted, “Summarily, BRICS ETFs offer investors exposure to the high-growth potential of emerging markets within the BRICS alliance through a single fund, providing a more convenient alternative to selecting individual stocks in each market.”

Regarding the perceived advantage for Nigeria, he added, “For Nigeria, the primary advantage of aligning with BRICS is the potential to reduce over-dependence on the U.S. dollar. Such a shift could mark a significant paradigm change, moving economic focus from the West to BRICS nations. This change would likely impact Western economies, as Nigeria would no longer be as reliant on the dollar.

“According to political analysts, the West’s concerns over this shift may be a key reason why Nigeria has been hesitant to join the BRICS alliance.

“The BRICS group comprises ten countries: Brazil, China, Egypt, Ethiopia, India, Iran, Russia, Saudi Arabia, South Africa, and the United Arab Emirates. The International Labour Organization (ILO) acts as a key knowledge partner, providing technical support to the BRICS on policies that promote decent work,” he explained.

Pastor Evans Adetokunbo Emmanuel of Grace Missions International shared a more cautious view.

“It won’t make a difference if gains are lost to corruption,” he said. “BRICS won’t provide free resources; Nigeria must effectively manage its advantages to avoid wasting opportunities.”

Publisher of New Dawn, an online news platform, Mr. Tunde Abatan, is optimistic about the arrangement if it serves Nigerians’ overall interest.

“Well, if it is in the overall interest of our well-being, it is in order. The world is going through realignment both economic and political; hence no country can be an island unto itself,” he said.

Abatan continued that, “Nigeria at this point needs to gain new allies to place itself in a position to reinvent our economy and reposition the country.

“In all, I believe we need to reexamine our structure and system of government to determine whether our economy can absorb the present Presidential system, which to me is expensive given our economic challenges.

“We should evolve a model of government suitable to our cultural diversities as a people,” he said.

In his own submission, Sayo Akintola, a staff with National Agency for Food and Drug Administration and Control (NAFDAC) is skeptical, wanting to know what South Africa, a founding member of BRICS, has gained from the union.

“We make ourselves available as a pawn in the hands of Russia to fight the US and the West. If I may ask, apart from bragging rights, what has South Africa gained from being a member all this while?” he queried.

Akintola, formerly a Business Editor at the Tribune, stated, “It’s all international politics to give the West the impression that Russia is not isolated after all, despite the ruins in Ukraine. Maybe it will make the West sit up too when it comes to handling matters that affect developing and underdeveloped countries. There’s beauty in competition. But the BRICS and the retinue of new members may not even give the US any sleepless nights. The majority of them remain formidable allies of the US.

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“The danger in such an alliance is that when two elephants fight, it is the grass that suffers. When Russia relies on North Korea to supply her troops in Ukraine, it is not a sign of strength. Russia is struggling and needs all the support to survive. The war in Ukraine is taking different dimensions by the day.

“Putin is jittery. BRICS is a body accommodating members who might even work for the US and the West,” he opined.

A Development Economist, Osaze Omoragbon, also told National Wire that, BRICS may be a respite for poor countries who see such associations as avenues for good interest rate loans.

“Poor countries eagerly join these economic and political blocs because they see it as an avenue to get more funds at cheaper rates,” he said.

Omoragbon also said, “These geopolitical powers are looking to keep these developing countries on their side at multilateral forums such as the UN, so they give incentives that attract these countries which essentially is a bribe.

“It’s a win-win situation for both sides: the global powers run a bloc populated by vassal states while poor countries get concessionary funding to finance infrastructure development.”

Nigeria Among 13 Nations Welcomed as BRICS Partners

Thirteen countries, including Nigeria, joined BRICS as partner nations, offering collaborative opportunities without full voting rights.

Other new partner countries include Algeria, Belarus, Bolivia, Cuba, Indonesia, Kazakhstan, Malaysia, Thailand, Turkey, Uganda, Uzbekistan, and Vietnam.

The BRICS bloc, which includes major emerging economies like China, Russia, and India, shared the announcement on social media, emphasizing its goal of building flexible alliances with developing countries.

In early 2024, BRICS granted full membership to Iran, Egypt, Ethiopia, and the United Arab Emirates, reflecting the bloc’s expansion to include more diverse emerging economies.

BRICS: A Growing Global Influence

Founded in 2009 by Brazil, Russia, India, and China, with South Africa joining in 2010, BRICS promotes trade, investment, and collaboration among major emerging economies. The 2024 summit, themed “Strengthening Multilateralism for Fair Global Development and Security,” underscored BRICS’ commitment to inclusive cooperation that drives balanced global development. The partner status extended to Nigeria and other nations fosters broader economic integration and partnership opportunities.

Nigeria’s Interest in BRICS and Global Alliances

Nigeria’s foreign policy recently demonstrated an intent to expand global partnerships. In 2023, Foreign Affairs Minister Yusuf Tuggar highlighted Nigeria’s interest in both BRICS and the G20, citing Nigeria’s economic strength and large population as assets. As Africa’s largest economy and most populous nation, Nigeria’s partnership with BRICS could lead to greater foreign investment in infrastructure and industrial development.

Vice President Kashim Shettima attended the 2023 BRICS summit in South Africa, but Nigeria has not yet sought full BRICS membership. Tuggar recently reiterated that full membership remains an option, pending strategic considerations from Nigeria’s administration.

Potential Benefits of BRICS Partnership for Nigeria

Nigeria’s BRICS partnership offers access to resources and expertise from leading emerging economies in areas like technology, infrastructure, and finance. The BRICS New Development Bank (NDB), for instance, funds infrastructure projects that support sustainable development, which Nigeria could potentially leverage. Additionally, collaboration with BRICS aligns with Nigeria’s goal to diversify its economic alliances and lessen reliance on Western-led financial institutions.

By joining BRICS, Nigeria can advocate for fairer trade and investment opportunities that benefit developing economies. This partnership reflects Nigeria’s broader vision to reduce dependence on Western economic frameworks and explore opportunities that support local industry and sustainable growth.

Looking Forward: Nigeria’s Potential Role in BRICS

With a struggling economy, Nigeria’s current BRICS partner status does not grant full membership privileges, but it marks a forward step in the international economic and diplomatic strategy of Africa’s most populous nation.

Engagement with BRICS has the potential to drive growth in key economic sectors, access new markets, and amplify Nigeria’s voice in global economic policy discussions.

While the national economy is still trying to recover from past waste, should Nigeria pursue full BRICS membership, alignment with major emerging economies could significantly advance Nigeria’s long-term economic agenda, positioning it as a key player in global economic governance.

With efforts to reduce waste, such as the President’s recent cabinet restructuring, Nigeria may recover under disciplined economic reinvention and a renewed sense of purpose.

 

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