Paramount Group

A pan-African BRICS is Our Future

A pan-African BRICS is Our Future

Paramount Group

By Ivor Ichikowitz

As an enthusiastic champion of Africa's economic and political development I was extremely proud of my country when South Africa was admitted to BRICS in 2010.

Twenty years previously South Africa was under apartheid rule and facing an uncertain future. Yet by the 2011 BRICS summit - which I attended with President Zuma - perceptions of our country had completely altered. BRICS membership did not change our country overnight, but to many business and political leaders across the world it signified our emergence as a growing international power.

As the leader of Paramount Group, South Africa's largest privately held defence and aerospace company, and Chairmen of Trans Africa capital, a private equity company, I am struck by the impact membership has had on global perceptions of South Africa.

When I conducted business in South America ten years ago there was always doubt about working with a South African company. Could we deliver on what we promised? Were our products really world beating? Despite our country's progress there were still unfounded doubts about our technical ability and political stability.

Since joining BRICS I have noticed a small yet visible shift in the attitudes of foreign business and political leaders. South Africa may have the smallest population and economy of Member States - but amongst BRIC countries and non-BRIC countries alike, it is my firm belief that South Africa is now held in higher regard.

In short, the symbolic impact of us being at the 'top table' has had a practical impact on my business dealings with partners in the Middle East, South America, Asia and beyond. It has also led to our BRIC partners increasingly viewing us as partners in development, job creation and innovation - as opposed to rivals.

A good example of this new symbiotic model is the proposed 'BRICS bank' that would allocate funds amongst members to drive development. Yes, this is only a proposal - but it is emblematic of a new attitude of collaboration amongst members.

However, while South Africa is benefiting from BRICS membership - and understandably South Africa is doing everything it can to promote itself through BRICS - the idea that South Africa is a gateway to the wider continent is flawed.

In the modern globalised world, international business can access any African state without having to go through South Africa. So the idea that South Africa can and will fulfil that dream is simply that - a dream.

And while many people talk of Nigeria joining BRICS - which would be very good for Nigeria - the bigger play for Africa is to form an African equivalent of BRICS, starting with the biggest economies.

Africa is on the brink of major transformation. Over the last ten years the continent has been home to six of the world's ten fastest growing economies - and with large parts of the rest of the world mired in recession, the outlook remains positive. This year the projected growth rate of the continent will be six per cent - better than most other parts of the world.

 

This is all great news but the honest truth is that Africa is not very good at working together - it is harder for example for a South African business to export to Nigeria than to Europe or the USA. And while we have regional economic groupings on the continent they don't talk to each other - and when they do it is often in conflict rather than collaboration.

It is this lack of integration between African nations that is holding the continent back. By forming a distinct economic grouping, a pan-African equivalent to BRICS, we could build on the good work already done by the African Union to work together for our collective economic interests.

There's no shortage of pan-African subjects which need to be addressed - issues like the beneficiation of raw materials, access to markets and tariffs. None of the individual economies have a loud enough voice on their own to make themselves heard in the global economy sadly, so Africa needs to speak as one combined power.

Opponents of these ideas always say the time is not right yet for Africa to do this. But this is nonsense - the time will be right when we decide it is right, and that can be now. We just need to get the impetus moving in the right direction to drive this integration.

Business has been taking the lead in this (as it was in driving the formation of BRICS) but in Africa the politicians have been slower in delivering this integration than in the BRIC nations. We need our political leaders to drive these closer ties.

Africa is the next frontier of growth, development and driver of the global economy - it is only held back by a lack of integration, confidence and coordination. If we are to take advantage of our current position we need to seize the moment to ratchet up our continental integration and leadership.

By bringing together a talented population of one billion people we could withstand any global competition - and truly call this 'African century'.

Ivor Ichikowitz is one of South Africa's leading business figures who owns a portfolio of companies across energy, hospitality, mining, oil and defence sectors. Mr Ichikowitz is executive chairman of private equity group TransAfrica Capital, a South African based private equity fund, and Africa's largest privately held defence and aerospace company, Paramount Group. Ivor has a strong interest in African innovation and growth across the continent.