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Russian President Vladimir Putin, who unexpectedly made a virtual appearance on the first day of the Brics Summit in Sandton on Tuesday, described the process of de-dollarising the grouping’s economic ties as both irreversible and “gaining pace”.
“In fact, this summit is to discuss the detail [of] the entire range of issues related to the transition to national currencies in all areas of economic cooperation between our five nations,” he said.
Read: ‘Reform global financial institutions’ says Ramaphosa as Brics bloc gathers
Putin, who did not attend the summit in person due to a warrant of arrest that was issued against him by the International Criminal Court in the wake of the Russia-Ukraine war, said in a recorded address that the Brics (Brazil, Russia, India, China and South Africa) bloc has “already become a credible alternative to existing Western development institutions”.
Common currency?
The five nations are seeking to introduce a common currency that would see them lessen their reliance on the dominant dollar. However, several economists, commentators and even politicians, such as South Africa’s Finance Minister Enoch Godongwana have warned that it is still premature to make this move.
Godongwana reportedly told Business Day, ahead of the Brics Summit and on the sidelines of the state visit to SA by China’s president Xi Jinping, that it was too early for the Brics bloc to adopt an alternative payment system to SWIFT.
He said this was the case more so for South Africa, which has trade more skewed towards the West, according to the publication. Godongwana has expressed similar sentiments before on the matter, and so has South African Reserve Bank Govenor, Lesetja Kganyago.
Read/listen:
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Godongwana’s comments came ahead of talks at the 15th Brics Summit, where some leaders have pushed for the introduction of a common currency for the bloc to trade with one another, in turn, decreasing the dependence on the dollar – world’s most dominant currency.
Meanwhile, billionaire and chair of African Rainbow Capital Patrice Motsepe, said at the Brics Summit on Tuesday that formation should be looked at as a long-term relationship that has to be based on mutual benefit, less on philanthropy.
“You can’t have relationships based on aid… philanthropy… donations. They don’t last,” he said.
Motsepe was the inaugural chair of the Brics Business Council, which was first convened in 2013, in part to increase trade relations between the nations in the Brics bloc as well as other African countries.
“In relation to South Africa and the African continent in the Brics relationship, we have to position ourselves as a country and a continent that produces goods and also has services which the Brics countries want,” added Motsepe.
Standard Bank CEO Sim Tshabalala said the African continent can be the breadbasket of the world in this century, given the right policy environment and investments.
“Investors from the Brics and worldwide do very much want to buy into Africa given [the] continent’s uniquely favourable demographics, immense natural resources, potential for low-cost industrialisation, and increasing market integration under the Africa Continental Free Trade Area,” he said
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