SA is 'not taking full advantage' of BRICS market's economic benefits | City Press

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South Africa has not been able to make the most of its BRICS grouping membership, and exports mainly raw materials without any added value to its BRICS counterparts Brazil, Russia, China and India, resulting in a sizeable trade deficit within the block.

Getty ImagesSouth Africa has not been able to make the most of its BRICS grouping membership which represents 42% of the global population and contributes about 18% to global GDP.

"It's not necessarily a surplus that we seek here because we might not see that the point is about narrowing or bridging the deficit. It's no use to set a time and in five years time or whatever many years we get to host again, and the trade deficit is deteriorated. What we want to see is a narrowing of the deficit and we want to use the deficit in a positive way, to open up business opportunities for our businesses," Nicolaou said.

The manufacturing sector has one of the biggest deficits with all BRICS countries, this as the sector has come under immense pressure because of mainly load shedding and climatic events that have caused massive disruptions in the industry.The recent Purchasing Managers Index remained in contractionary territory with businesses concerned about the outlook over the next six months. Manufacturing has had mixed outcomes over the last few quarters since contracting by 11.

Nicolaou said part of the problem was the lack of implementation of policies such as the localisation policy. Last month, at the Black Business Council summit, he was critical of how the localisation policy was being implemented by government departments when it comes to procurement. “In South Africa we export half of what we produce in value terms, a year that's roughly about 1$2.8 billion as of last year and if you look at where these products are going, about 40% of our exports go into Africa, Europe about 20% and of course countries in Asia."

 

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