South Africa Trade Deficit with BRICS Partners Widens
Research indicates a growing trade deficit between South Africa and its BRICS partners, reaching $9.6 billion. this raises questions about the benefits of South AfricaS membership in the bloc since 2010.
A study by university of Johannesburg professor Bhaso ndzendze delves into the trade dynamics, revealing a consistent and widening deficit over the 14-year period – increasing from $3.6 billion in 2010 to $13.2 billion in 2024. This deficit is disproportionately larger compared to South Africa’s trade relationships with the EU and the US, were the deficit is narrowing and a surplus exists, respectively.
While South African exports to BRICS nations have grown at an average annual rate of 11.49% since 2010, the composition of those exports is a key concern. It’s critically important to note that BRICS countries are not significantly importing South Africa’s manufactured goods.
The research,published in the Asian Review of Political Economy,utilized data from the South African Revenue Service (Sars) and the UN’s Trademap database,employing trend and comparative trade balance analyses. The analysis reveals that South Africa’s exports to BRICS partners are overwhelmingly raw minerals and agricultural produce. For example, none of the original four BRICS countries import South African machinery or vehicles at a substantial level.
This asymmetrical trade relationship presents a dilemma for Pretoria, especially given its strengthening ties with moscow and Beijing. The study proposes establishing a BRICS treaty to eliminate both tariff and non-tariff barriers. A thorough guide to current tariff rates applied by each member to the others, including South Africa, is recommended as a starting point.
The findings paint a complex tapestry of economic interaction, suggesting a need for a re-evaluation of South Africa’s BRICS strategy.
In conclusion, the research highlights a persistent trade imbalance that warrants further inquiry and proactive measures to ensure South Africa benefits equitably from its BRICS membership.