Month: August 2023

What does the expansion mean for global geopolitics?

The 15th BRICS Summit held in Johannesburg South Africa from 22-24 August 2023, attended by over 60 heads of state, from Africa, Middle-east, Asia, and South America, concluded with some noteworthy outcomes. Six new members were admitted to the bloc, with many more having shown keen interest to join, as illustrated in the diagram above.

The BRICS (Brazil, Russia, India, China, and South Africa), originally established in 2009, was already a group of major emerging economies. The inclusion of Saudi Arabia, Iran, UAE, Argentina, Egypt, and Ethiopia into BRICS will likely have significant implications for the global geopolitical arena. It could potentially expand the influence and reach of the group, altering the balance of power in international relations. This new configuration could impact economic cooperation, trade dynamics, regional stability, and negotiations on global issues.

We take a closer look at the newly configured grouping and analyze its likely intentions and the prospects of its success.

Item No.	Country	Population (millions)	GDP (trillions) (nominal)	GDP Growth (%)	Oil production (‘000s barrels per day)	Exports of Goods ($ billions)
1.	China	1,425	$19,37	5,6%	4,111	$3,594
2.	India	1,428	$3,73	6,1%	737	$453
3.	Brazil	0,216	$2,06	1,7%	3,107	$334
4.	Russia	0,144	$2,08	4,9%	11,202	$532
5.	S. Africa	0,060	$0,407	0,3%	0	$123
6.	Saudi Arabia	0,037	$1,06	1,9%	12,136	$410
7.	Iran	0,089	$0,376	2,5%	3,822	$73
8.	UAE	0,0095	$0,495	3,0%	4,022	$599
9.	Argentina	0,045	$0,641	5,2%	706	$88
10.	Egypt	0,112	$0,477	4,2%	613	$49
11.	Ethiopia	0,126	$0,156	5,8%	0	$3.9
	Total	3,691	$30,852	–	40,456	$6,258

The BRICS+ population totals 3,7 billion which represents approximately 46% of Global population, with the rest of the World on 4,3 billion making up the remaining 54%. The BRICS GDP of $30,9 trillion represents 30% of the global total, with the Rest of the World generating $74 trillion in nominal terms. The BRICS 40,4 million barrels of oil production represents 43,1% of global production, with the Rest of the World producing 53,3 million barrels a day. And, on $6,258 billion, the BRICs are exporting 25,1% of global output, versus $18,646 billion for the Rest of the World.

What is the significance of this first round of admissions into the BRICS bloc, which is set to be followed by further recruiting rounds at future BRICS summits? There are up to 40 nations who have declared their intention to join BRICS in future, and among them includes nations like Algeria, Nigeria, Venezuela, DRC and Kazakhstan, all of whom are well endowed with oil, gas and uranium in the case of the latter. Kazakhstan holds the worlds largest deposits of Uranium. In the case of DRC, Cobalt and Copper and the abundance of water resources with significant Hydro power potential.

The BRICS bloc is set to control current and future energy markets with BRICS+ also possessing many of the minerals needed for furture green economies, such as Lithium, Cobalt and Copper found in abundance in countries like Argentina and the Democratic Republic of Congo (DRC). The famous quote below by Henry Kissinger encapsulates what may be the intent!

The next stage of the tectonic geopolitical shifts is complete de-dolarization, which we will look into in detail in the next blog. In 1973, the petrodollar system was created through a deal between the US and Saudi Arabia. The countries agreed to price and trade oil in US dollars. With oil standardized in terms of dollars, any country that purchased oil from Saudi Arabia would have to use dollars.

Making the case for regional integration in Africa (creating five fully integrated provinces of the URA by 2030)!

Given Africa’s expansive size and diversity of ethnic groupings and cultures, the best approach for the continent to achieve ultimate unity is to start at a regional level to implement the following bold policies:

• Complete elimination of former colonial national borders between member states within each region, with current countries to form new provinces of the regions! The region to elect a governor of the region, with each province having a mayor, as in a federal government system! The AU to become the new national/central government with its Chair to be elected the continents President post 2030! With the political administrative headquarters in Addis Ababa.
• Establishment of four financial capitals namely in South Africa, Nigeria, Egypt and Kenya with the central region integrating into the EAC’s financial administration. The integration of the capital markets would be on the four main exchanges in these respective countries ensuring complete regional coverage for West, North, East and Southern regions by 2030.
• Single African passport (including visa-free African travel all over Africa)!
• Single African currency (to facilitate intra-regional and continental trade), to be implemented by 2030, to be launched on the back of or in parallel with a potential BRICs currency!
• Single regional political administration, with a regional Governor born out of the current regional economic blocks (ECOWAS, EAC, SADC, AMU, CEN-SAD etc., with a complete mandate review)! The regional economic blocks seem to have lacked a cohesive and integrated strategy that is driving towards ultimate unification, without some form of political integration. Some see them being exploited by western powers as has been observed in ECOWAS who announced the intention to introduce a single currency the ‘ECO’ by 2020, however various delays have seen this pushed out to 2027. There were also reports that France attempted to hijack the process and take it over to replace the CFA Franc.

The African Regional Economic Communities (RECs) were established as part of the African Union’s efforts to promote regional integration, cooperation, and economic development on the continent. These RECs serve as building blocks for the African Union’s broader goal of achieving African economic integration and unity.

The RECs were established by member states of the African Union and are primarily driven by the respective countries in each region. The establishment of these communities was a gradual process, often involving negotiations, agreements, and collaboration among neighboring countries with shared economic, social, and geographical interests.

Each REC has its own specific history, goals, and structure. Some of the notable RECs include:

1. Economic Community of West African States (ECOWAS): Established in 1975 to promote economic integration and cooperation among West African countries.
2. East African Community (EAC): Initially established in 1967 but later dissolved, it was revived in 2000 to enhance regional cooperation and integration among East African countries.
3. Southern African Development Community (SADC): Founded in 1980 to promote economic development, peace, and security in southern Africa.
4. Common Market for Eastern and Southern Africa (COMESA): Established in 1994 to promote economic integration and development in Eastern and Southern Africa.
5. Arab Maghreb Union (UMA): Established in 1989 to promote economic and political integration among North African countries. However, it has faced challenges and has not been fully functional.

The establishment and effectiveness of these RECs vary based on political will, economic interests, and the commitment of member states. The African Union plays a role in coordinating and supporting the activities of these RECs to ensure greater continental integration and development.

Africa is commonly divided into five main regions:

1. Northern Africa: This region includes countries located along the northern coast of Africa, such as Egypt, Libya, Tunisia, Algeria, and Morocco.
2. Western Africa: Encompassing the western part of the continent, this region includes countries like Nigeria, Ghana, Senegal, and Mali.
3. Central Africa: This region is located in the central part of the continent and includes countries such as the Democratic Republic of Congo, Cameroon, Central African Republic, and Chad.
4. Eastern Africa: Countries in this region include Kenya, Ethiopia, Tanzania, Uganda, and Somalia. It covers the eastern coast of the continent.
5. Southern Africa: This region includes countries in the southernmost part of Africa, like South Africa, Zimbabwe, Zambia, Namibia, and Botswana.

These regions are not strict political or geographical divisions, but they help provide a general sense of the different parts of the continent with distinct cultural, historical, and geographical characteristics.

As of September 2021, the approximate population figures for each of Africa’s five main regions are listed below. Keep in mind that these numbers are subject to change over time due to birth rates, migration, and other demographic factors.

1. Northern Africa: Approximately 200 million people.
2. Western Africa: Approximately 400 million people.
3. Central Africa: Approximately 150 million people.
4. Eastern Africa: Approximately 450 million people.
5. Southern Africa: Approximately 180 million people.

Please note that these figures are rough estimates and can vary depending on the source and the specific countries included in each region. For the most up-to-date and accurate population data, I recommend referring to recent demographic studies or official census reports.

The main languages spoken in each of Africa’s five main regions:

1. Northern Africa:

• Arabic is widely spoken across this region due to historical and cultural ties.
• Berber languages are also spoken in areas like Morocco, Algeria, and Tunisia.

2. Western Africa:

• English and French are the official languages in many countries due to colonial history.
• Local languages like Hausa, Yoruba, Igbo, and Wolof are widely spoken.

3. Central Africa:

• French is commonly spoken due to colonial history in countries like Democratic Republic of Congo, Cameroon, and Central African Republic.
• Local languages like Lingala, Kikongo, and Swahili are also prevalent.

4. Eastern Africa:

• Swahili is a widely spoken lingua franca in this region, used in countries like Kenya, Tanzania, and Uganda.
• Amharic is the official language of Ethiopia.
• Other languages like Somali, Oromo, and various Nilotic languages are spoken.

5. Southern Africa:

• English is often spoken as a second language due to colonial influence in countries like South Africa, Zimbabwe, and Zambia.
• Afrikaans is spoken in South Africa and Namibia.
• Local languages like Zulu, Xhosa, and Sotho are widely spoken.

These language distributions can vary within countries, and there are often multiple languages spoken within each region due to the diversity of cultures and ethnic groups present.

Conclusion

The EAC appears to be leading the way in terms of achieving regional integration among the current regional economic blocks. The EAC has successfully eliminated all non-trade barriers, EAC members can travel visa-free in EAC countries, EAC member states appear to all share similar cultural heritage and most speak Swahili, the EAC has muted implementing a single currency in the region to facilitate intra-regional trade. This is a shining example for the rest of the continent on how to achieve regional integration! The video in the link below illustrates just how they are doing it!

Africa is a continent rich in mineral resources, and it is known for its vast deposits of various valuable minerals. The continent’s mineral wealth has played a significant role in shaping its history, economy, and geopolitics. Some of the key minerals found in Africa include:

1. Gold: Africa is one of the leading producers of gold in the world. South Africa, Ghana, Mali, and Tanzania are among the top gold-producing countries on the continent. Gold mining has been a major economic activity for many African nations and has contributed to their GDP and foreign exchange earnings.
2. Diamonds: Africa is also a major source of diamonds, particularly from countries like Botswana, South Africa, Angola, and the Democratic Republic of Congo. Diamonds have been a significant source of revenue for these countries but have also been associated with issues of conflict, illegal mining, and human rights abuses in some regions.
3. Copper: Countries such as Zambia and the Democratic Republic of Congo hold vast copper reserves. Copper mining has been crucial for their economies, but challenges like resource mismanagement and corruption have also affected the sector.
4. Platinum: South Africa is a dominant producer of platinum, a precious metal widely used in industrial applications, especially in the automotive and chemical industries.
5. Cobalt: The Democratic Republic of Congo is the world’s largest producer of cobalt, which is a crucial component in batteries used for electric vehicles and various electronic devices.
6. Iron Ore: Africa has substantial iron ore reserves, with countries like Mauritania, South Africa, and Algeria possessing significant deposits. Iron ore is essential for the production of steel, a vital material for construction and industrial activities.
7. Uranium: Several African countries, including Niger and Namibia, have significant uranium deposits, which are crucial for nuclear energy production.
8. Bauxite: Guinea is a major supplier of bauxite, the primary ore used to produce aluminum.
9. Phosphates: Countries like Morocco and Tunisia have large reserves of phosphates, which are used primarily in agricultural fertilizers.

The abundance of mineral resources in Africa has the potential to fuel economic growth, attract foreign investments, and provide job opportunities. However, the exploitation of these resources has often been accompanied by challenges, such as environmental degradation, political instability, and issues related to governance and corruption. Additionally, the so-called “resource curse” has affected some African countries, where mineral wealth has not always translated into sustainable development and societal progress.

Efforts are being made by some countries and international organizations to ensure responsible and sustainable mining practices and to use mineral revenues to promote socio-economic development and alleviate poverty in the region. Nonetheless, managing and leveraging Africa’s mineral wealth remains a complex and multifaceted challenge.

Focus on the Democratic Republic of Congo

The Democratic Republic of Congo (DRC) is one of the richest countries in terms of mineral resources. Its vast deposits have the potential to make it one of the wealthiest nations in Africa. However, the exploitation of these resources has also been associated with significant challenges and conflicts.

Some of the key mineral resources found in the DRC are:

1. Cobalt: The DRC is the world’s largest producer of cobalt, which is a critical component in the manufacturing of batteries used in electric vehicles, smartphones, and other electronic devices. Cobalt mining is concentrated in the southern part of the country, particularly in the Katanga (now Haut-Katanga, Lualaba, and Tanganyika) province.
2. Copper: The DRC is also a major producer of copper, with significant deposits located mainly in the Katanga province. Copper is essential for various industries, including construction, electronics, and power generation.
3. Diamonds: The DRC is a significant source of diamonds, particularly alluvial diamonds found in riverbeds. The country has both industrial and artisanal diamond mining. However, the diamond trade has been linked to conflicts and human rights abuses in certain regions, such as the infamous “blood diamonds” or “conflict diamonds.”
4. Gold: Gold is another valuable mineral found in the DRC. Gold mining takes place in various regions across the country, with a concentration in the northeastern provinces.
5. Coltan: The DRC holds vast reserves of coltan, a mineral containing tantalum and niobium, which is used in electronic devices like smartphones and computers. The mining of coltan has been associated with environmental degradation and conflict-driven exploitation.
6. Tin: Tin is also mined in the DRC and is used in various industries, including electronics and packaging.

The abundance of these mineral resources has attracted significant foreign investment in the DRC’s mining sector. However, the exploitation of these resources has been accompanied by numerous challenges:

1. Conflict and Instability: The mining regions in the DRC have been marred by conflicts and violence, often fueled by competition for control over valuable mineral resources. Armed groups and militias have been involved in exploiting these resources, leading to instability and humanitarian crises.
2. Environmental Impact: The mining activities in the DRC have resulted in significant environmental degradation, including deforestation, soil erosion, and pollution of water bodies.
3. Social Issues: Mining communities often face poor working conditions, human rights abuses, and challenges related to child labor and forced labor.
4. Governance and Corruption: The DRC has faced challenges in managing its mineral resources effectively. Corruption and mismanagement have hindered the equitable distribution of wealth and benefits from mining.

Efforts are being made to address these challenges and promote responsible and sustainable mining practices in the DRC. International initiatives, like the Kimberley Process Certification Scheme for diamonds and the Extractive Industries Transparency Initiative (EITI), aim to ensure that mineral resources are mined and traded responsibly and that the revenues generated from mining benefit the people of the DRC. However, much work remains to be done to harness the potential of these resources for the country’s development and the well-being of its citizens.

The DRC’s secret power in addition to its mineral wealth lies in the Congo River basin – DRC’s water resources have the potential to truly accelerate Africa’s economic development and bring 500 million Africans out of poverty, building a burgeoning middle class that drives a dynamic and inclusive economy in Africa:

The Democratic Republic of Congo (DRC) possesses significant power generation potential, primarily due to its vast hydropower resources. The DRC’s potential to generate electricity from its abundant water resources is immense and could play a crucial role in not only its own development but also in contributing to regional and continental energy needs.

Here’s a closer look at the DRC’s power generation potential and its potential contributions to Africa’s development:

Hydropower Potential:
The DRC is often referred to as the “World’s Water Tower” because it is home to the Congo River Basin, which is the second-largest river basin in the world by discharge volume. This river system offers immense potential for hydropower generation due to its numerous rivers and waterfalls. The Inga Falls on the Congo River, in particular, hold great hydropower potential.

Inga Hydroelectric Complex:
The Inga Hydroelectric Complex is a series of hydroelectric dams located on the Congo River. It has the potential to be one of the largest hydropower projects in the world. The complex currently consists of two operational stations, Inga 1 and Inga 2, but the envisioned project, known as Grand Inga, aims to develop a significantly larger capacity. If fully realized, Grand Inga could have the potential to generate around 40,000 megawatts (MW) of electricity, which is more than double the capacity of the Three Gorges Dam in China, currently the world’s largest.

Contribution to Development:

1. Domestic Electricity Supply: The DRC’s substantial hydropower potential could revolutionize its domestic electricity supply. Improved access to reliable and affordable electricity would stimulate economic growth, support industrial development, and improve the quality of life for its citizens.
2. Regional Energy Trade: The DRC’s surplus electricity could be exported to neighboring countries in Africa, helping to address regional energy deficits and fostering economic cooperation. Energy exports could generate revenue for the DRC while supporting the development of electricity-starved nations.
3. Industrialization: A consistent and abundant energy supply is crucial for industrialization. The availability of affordable electricity could attract foreign investments, particularly in energy-intensive industries, contributing to job creation and economic diversification.
4. Rural Electrification: Reliable electricity access in rural areas can spur agricultural and small-scale industrial activities, leading to poverty reduction and improved living conditions.
5. Climate Change Mitigation: Hydropower is a clean energy source with a relatively low carbon footprint. Developing hydropower in the DRC could help mitigate climate change by reducing the reliance on fossil fuels for energy generation.

Challenges and Considerations:
Despite its immense potential, realizing the benefits of the DRC’s hydropower resources comes with challenges:

1. Infrastructure: Developing large-scale hydropower projects requires substantial infrastructure investment, including dams, transmission lines, and distribution networks.
2. Financing: Securing funding for such massive projects can be a challenge, requiring both domestic and international investments.
3. Environmental and Social Impact: The construction of large dams can have environmental and social consequences, including habitat disruption and displacement of communities.
4. Political and Governance Issues: The DRC’s political stability and governance affect its ability to attract and manage investments effectively.

In conclusion, the Democratic Republic of Congo’s power generation potential, especially in the form of hydropower, has the capacity to be a transformative force for both the country and the broader African continent. By addressing the challenges and implementing sustainable and responsible practices, the DRC could significantly contribute to its own development while also playing a pivotal role in meeting Africa’s growing energy demands.

The current economic impact of Africa’s minerals production

Africa is home to vast and abundant reserves of natural resources, with resources ranging from black gold popularly known as oil to large reserves of cobalt, found all across the mineral-rich lands of the Congo.

Africa is home to nearly all valuable minerals that are essential to generating wealth, producing commodities, and advancing technology. Several African nations have prospered because of their mineral resources, some more so than others.

Africa is home to approximately 30% of the world’s entire mineral reserves. While some countries rely on oil, some are rich in diamonds, and others in gold, copper, cobalt, coal, iron ore, uranium, and others. According to a research report conducted by the research and analysis division of The Economist Group, the sister company to The Economist newspaper, Economist Intelligence Unit, South Africa, Nigeria, Algeria, Angola, and Libya produce more than two-thirds of Africa’s mineral wealth, owing to their large oil reserves, with the exception of South Africa, which has an abundance of gold and other precious materials.

The report also indicates that high prices for copper, oil, iron ore, aluminum, and gas will encourage investment and all are contributing to reducing external imbalances, stabilizing currencies, and boosting economic development. Commodity prices are driving an export boom across the continent.

Below are the top 10 countries in Africa that exported the largest volumes of natural resources in 2022 and as such, generated the most wealth from its abundant reserves:

Rank	Country	Predominant resources	Annual mineral production
1.	South Africa	Gold, manganese, platinum, coal & others	$124,96 billion
2.	Nigeria	Oil, iron ore, columbite & others	$52,69 billion
3.	Algeria	Hydrocarbons	$38,7 billion
4.	Angola	Diamond, Gold, Oil & others	$32,94 billion
5.	Libya	Oil, Clay, Cement, Salt & others	$27,03 billion
6.	Egypt	Gold, Copper, Silver & others	$23,22 billion
7.	Ghana	Gold, Limestone, Iron ore & others	$14,97 billion
8.	DRC	Gold, Copper, Cobalt & others	$13,69 billion
9.	Gabon	Manganese, Iron ore, Uranium & others	$10,92 billion
10.	Zimbabwe	Platinum, Chrome, Gold, Coal & others	$9,77 billion