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IOL News
3 days ago
- Business
- IOL News
Turning declarations into deliverables: South Africa's BRICS 2025 Challenge
For South Africa, the BRICS 2030 horizon offers not just hope, but a promising future, writes Ayanda Holo. Image: IOL / AI By Ayanda Holo Beneath the glittering chandeliers of the Bank of China building in Johannesburg, Chinese Ambassador Wu Peng addressed a gathering of investors, policymakers, and technocrats. At his side sat South Africa's Deputy Finance Minister Dr David Masondo, a key architect of the government's economic recovery and structural reform agenda. The occasion marked the release of the Chinese Investor Survey, a moment that revealed not only the depth of Sino-South African relations but also the lingering bottlenecks that continue to hinder what could be a transformative partnership. Ambassador Wu's tone was both celebratory and cautionary. Over 200 Chinese enterprises have injected more than $11 billion into South Africa, creating jobs, taxes, and valuable industrialisation footprints. Yet, despite this progress, the Ambassador pointedly highlighted recurring frustrations: the slow and sometimes opaque processing of work visas for essential engineers and managers and the heightened security threats to Chinese nationals. These issues, he suggested, could jeopardise investor confidence unless addressed with urgency and sincerity. At the heart of his speech was a subtle but potent reference to Declaration 42 of the BRICS 2025 Strategy, which states: "We welcome the results of the Strategy for BRICS Economic Partnership 2025… and look forward to the conclusion and implementation of the Strategy for BRICS Economic Partnership 2030, which will… guide cooperation on issues relating to the Multilateral Trading System, Digital Economy, International Trade, Financial Cooperation and Sustainable Development." This strategy is not just a document, but a roadmap to our future. This forward-looking blueprint aims to deepen the ties that bind BRICS nations, with South Africa poised to benefit as a regional gateway for Asia–Africa trade. But such ambitions rest precariously on domestic execution. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad loading The Visa Conundrum: When Policy Fails Practice A compelling case in point emerged from a significant $200 million investment project in the Eastern Cape, a region with great potential for economic growth. The project procured high-grade industrial equipment from Yangzhou Metal Forming Machine Tool Co. The firm dispatched three highly skilled engineers to oversee installation and training. Despite submitting complete documentation to VFS Global, including verified invitation letters from their South African host, the engineers were denied work visas for several months. This delay was not only an administrative embarrassment but also a tangible blow to investor confidence. The engineers were essential to commissioning a production line that was central to the project's ROI timeline. The months-long delay undermined the "open the way" vision of Operation Vulindlela, a flagship reform programme by the South African Presidency and Treasury designed to reduce red tape for investors. Is Operation Vulindlela truly living up to its name? According to a recent SA Government News release dated March 2025, the Department of Home Affairs has introduced improvements to fast-track visa applications for investors and critical skills workers. A new "Trusted Employer Scheme" was also piloted with large multinationals and BRICS-partner firms in mind. Yet the Eastern Cape incident underscores a gap between policy and implementation, a chasm where projects stall, costs rise, and goodwill wanes. From Zero-Tariffs to Zero-Tolerance on Inefficiency China's recent announcement to provide zero-tariff treatment to 53 African countries via the Framework Agreement on Economic Partnership for Shared Development is a tectonic shift in global trade patterns. It gives African manufacturers and agricultural producers unprecedented access to the world's second-largest economy. And South Africa, with its mature logistics, industrial base, and financial institutions, is uniquely positioned to lead this integration. But it must not allow procedural inertia to squander strategic advantages. This is particularly critical in sectors like automotive components, green energy infrastructure, and advanced manufacturing, where Chinese investment has surged. Each of these sectors requires the temporary importation of technical personnel, often on tight deadlines to transfer knowledge and integrate systems. Ambassador Wu's call for smoother visa processes is therefore not a favour to China, but a necessary step if South Africa is serious about its BRICS role. It's not just about accommodating Chinese investors, but about creating an environment where all BRICS nations can thrive, boosting South Africa's economy and global influence. A Catalogue of Cooperation It is worth reminding readers of the many bilateral and multilateral agreements that underpin this evolving relationship. These include: The China-South Africa Comprehensive Strategic Partnership Agreement (2010).The FOCAC Beijing Action Plan 2019–2025 The Belt and Road MOU, signed in 2015, focuses on infrastructure Investment Treaties and Double Taxation Agreements, protecting investor rights The Annual SA-China High-Level People-to-People Exchange Mechanism, encouraging cultural, academic, and tech innovation links. Each of these frameworks, including the 2025 BRICS Economic Strategy, calls for the removal of administrative and logistical barriers that impede the flow of capital, of people, of ideas. What Must Change? If Pretoria is to maintain credibility within BRICS and its reform agenda, several actions are urgent: Mandate real-time escalation channels for work visa cases tied to investment projects over R50 and enforce the Trusted Employer Scheme beyond pilot status. Include a BRICS Investor Fast Lane under the Department of Trade, Industry and Competition (DTIC).Publish quarterly Operation Vulindlela scorecards, with measurable impact on investor facilitation. As Ambassador Wu concluded, "Challenges are part of development." But challenges left unaddressed become liabilities. For South Africa, the BRICS 2030 horizon offers not just hope, but a promising future. Whether that promise becomes reality depends not on declarations from abroad, but on decisions made at home. * Ayanda Holo is the President of TV BRICS AFRICA ** The views expressed do not necessarily reflect the views of IOL or Independent Media.
IOL News
07-07-2025
- Business
- IOL News
From St. Petersburg to Soweto: A BRICS opportunity to modernise South Africa's water services
General view during a plenary session of the BRICS summit in Rio de Janeiro, Brazil. Image: Pablo Porciuncula/ AFP By Ayanda Holo, President of TV BRICS AFRICA Just weeks after Deputy President Paul Mashatile stood before global investors at the St. Petersburg International Economic Forum and affirmed that "South Africa and Russia will significantly deepen trade relations as BRICS partners," the echoes of that commitment are already rippling through our economy, not as platitudes, but as pipelines of opportunity. From July 8 to 10, Johannesburg's Gallagher Convention Centre becomes the stage for a quiet revolution in South-South cooperation. A powerful delegation of industrial innovators from St. Petersburg, Russia's gateway to the world, will participate in IFAT Africa 2025, the continent's most significant environmental technology exhibition. These firms bring with them more than technological marvels. They provide evidence that the BRICS economic narrative is not abstract, but actionable, visible, and mutually rewarding. At the heart of this participation lies an important, albeit underreported, diplomatic milestone: the sister-city relationship between St. Petersburg and Johannesburg, established in 2001. This IFAT is more than symbolism; it is a commercial channel waiting to be scaled. The IFAT Africa exhibition is the channel in motion. St. Petersburg companies attending the event — including Vodokanal, TFBE, NAECO, and EXIMO — are global leaders in water purification, industrial wastewater treatment, and urban water system efficiency. The presence of Vodokanal, which manages one of the largest water utilities in Europe, is especially noteworthy for municipalities across South Africa that are grappling with ageing infrastructure, load-shedding-related pump failures, and ballooning urban populations. South African enterprises, utilities, and government departments must view this moment not just as another exhibition, but as an open invitation to co-develop, co-finance, and co-own solutions for our most pressing environmental and economic challenges. It is no secret that water is becoming one of the scarcest and most politicised resources in the 21st century. What is less often said is that water management is also one of the fastest-growing economic sectors, globally projected to exceed $1 trillion by 2030. For South African businesses, especially in Gauteng, Limpopo, and the Eastern Cape, investing in this sector is not a side project; it is a national strategy. The IFAT Africa schedule reads like a masterclass in applied BRICS cooperation. At 12:30 on July 8, the official opening of the St. Petersburg stand (Hall 3, Stand B035) will set the tone. Minutes later, the "South Africa – Saint Petersburg Economic Cooperation Dialogue" roundtable will gather key stakeholders, including the Johannesburg Chamber of Commerce and Industry, Rand Water, the Water Research Commission, and Russia's Trade Mission. And at 15:15, a cutting-edge panel will dissect new technologies in water treatment and sludge disposal, real solutions for real problems. But beyond the booths and name badges, the subtext is clear: Russia is not simply seeking to export products; it is looking to localise, partner, and innovate together with African counterparts. This model is the cornerstone of BRICS industrial policy, offering a direct contrast to the extractive models that historically defined trade between Africa and the West. Indeed, as South Africa eyes industrial diversification and seeks to build sustainable cities, now is the time for our CEOs, utility executives, and provincial heads to walk the talk. IFAT Africa should not be a passive exhibition tour. It should be a deal-making arena, a site of memorandum signings, pilot project launches, and matchmaking for public-private partnerships.
IOL News
05-05-2025
- Business
- IOL News
The Decline of the Dollar, the Rise of BRICS, and the Future of African Development Financing
The shifting global financial landscape, marked by the decline of the US dollar and the ascent of BRICS nations, presents Africa with unprecedented opportunities for development financing and economic partnerships, says the writer. Image: IOL / Ron AI By Ayanda Holo The global financial order is experiencing a profound transformation, marked by the waning dominance of the US dollar and the emergence of alternative economic alliances such as BRICS+ countries (Brazil, Russia, India, China, and South Africa, Iran Egypt, UAE, Ethiopia). This change is crucial for Africa, which has traditionally depended on Western financial institutions for development funding. As the credibility of the International Monetary Fund (IMF) and the World Bank erodes, African nations are compelled to seek new sources of capital and economic partnership. The present article examines how the decline of the dollar influences Africa's reliance on external funding, explores the potential of BRICS to reshape Africa's economic landscape, assesses the risks associated with dependence on BRICS, and analyses the role of local currencies in enhancing intra-African trade. Based on research from tier one institutions and BRICS Think Tanks, this article examines the potential opportunities that the rise of BRICS offers for Africa amid tumultuous trade wars framed around current tariffs and reciprocal tariffs. It highlights the importance of a balanced and diversified approach to reduce reliance on Western influence and promote sustainable development and economic sovereignty. It also proposes putting in place strategies that are resistant to economic shocks emanating from trade wars beyond the co. The Decline of the Dollar and Its Impact on African External Funding Erosion of Dollar Dominance The US dollar has long served as the linchpin of global finance, underpinning trade, reserves, and development lending. However, recent geopolitical developments, including aggressive US financial policies and escalating tensions between major powers, have undermined confidence in the dollar's stability (Zhou, 2023, Tsinghua University). According to the South African Institute of International Affairs (SAIIA), the mass sell-off of US Treasury bonds by global investors reflects a growing skepticism about the dollar's long-term viability (SAIIA, 2023). Consequences for African Funding Africa's dependence on dollar-denominated loans and aid has rendered it vulnerable to fluctuations in the dollar's value and to shifts in Western investor sentiment. The African Development Bank (AfDB) estimates that the continent faces an annual infrastructure financing gap of approximately $100 billion (AfDB, 2022). Traditionally, this gap has been bridged by Western institutions and private investors. However, as the dollar's appeal diminishes, these sources of funding are contracting, leading to stalled projects and slower economic growth (BRICS Policy Center, 2023). Moreover, many African countries are already grappling with unsustainable debt burdens, much of it denominated in dollars. Currency depreciation exacerbates repayment challenges, increasing the risk of debt distress (Institute for Economic Research on Innovation, South Africa, 2023). The withdrawal of Western investment, driven by risk aversion and dollar instability, further compounds these challenges, threatening to deepen inequality and stall development across the continent. BRICS as an Alternative: Opportunities and Mechanisms Emergence of BRICS Financial Institutions In response to the limitations of the Western-dominated financial system, BRICS has positioned itself as a beacon of hope for African development financing. The New Development Bank (NDB), established by BRICS, has already disbursed over $30 billion for infrastructure projects, including several in Africa (NDB Annual Report, 2023). The NDB's willingness to finance projects in local currencies reduces exposure to dollar volatility and aligns with the broader BRICS strategy of de-dollarization (BRICS Research Group, University of Cape Town, 2023). South Africa's Strategic Role South Africa serves as a critical gateway for BRICS investment on the continent. Its mineral and diamond exports, previously reliant on Western markets, are increasingly redirected to BRICS partners such as China and India (SAIIA, 2023). Furthermore, Chinese-led initiatives like the Belt and Road Initiative (BRI) have provided alternative funding streams for African infrastructure, often with fewer conditions than Western loans (China-Africa Research Initiative, Johns Hopkins University, 2023). Local Currency Trade and Proposed BRICS Currency BRICS nations are actively promoting trade settlement in local currencies, thereby reducing reliance on the dollar. The potential introduction of a common BRICS currency, as discussed at recent summits, could further erode the dollar's dominance in global trade (BRICS Policy Center, 2023). For Africa, these developments offer the prospect of more stable and predictable financing, less susceptible to external shocks.
