Zimbabwe Wants To Join BRICS

BRICS share of global GDP (PPP) has overtaken that of the G7, with the gap is expected to widen as more countries join the bloc. Potential candidates include Saudi Arabia, Iran, Argentina, Indonesia, Nigeria, Türkiye, Mexico, and the UAE. Even Zimbabwe has expressed interest in joining the group, although South Africa may be reluctant to approve their ascension.    

With one of the best educated populations in Africa and a rich endowment of natural resources, Zimbabwe stands to benefit greatly from BRICS membership. Having faced years of public policy induced economic decline, exacerbated by Western sanctions, the landlocked Southern African nation has struggled to grow its economy and stabilise its currency despite numerous interventions.  

The government even initiated a scheme whereby domestically produced gold could be purchased at a discount in Zim dollars. The hope was that this arbitrage opportunity would encourage investors to convert their US dollars into Zim dollars (to buy the discounted gold), which would in turn narrow the gap between the exchange rates on the official and parallel markets.

Unfortunately, despite some initial success, the innovative scheme could not prevent the dollar re-emerging as the country’s dominant currency. According to the most recent analysis by Bloomberg, almost 80% of economic activity in Zimbabwe is now being conducted in US dollars despite the re-introduction of the Zimbabwe dollar less than five years ago.

Although it probably won’t save Zimbabwe’s currency, joining the BRICS could help Zimbabwe resolve some of its other economic issues by enabling better access to loan capital as well as greater export revenues. Commodity hungry BRICS countries such as China and India have already shown an interest in exploiting the country’s mineral wealth and have large export markets which could help to restore Zimbabwe’s once flourishing agricultural sector.

As many of the BRICS countries already have strong ties to Zimbabwe, BRICS membership may seem like a good idea. But Zimbabwe has a much weaker and smaller economy compared with other BRICS nations so the addition of Zimbabwe to the bloc will likely be approached with caution. South Africa, in particular, could be reluctant to consent to Zimbabwe’s ascension.

As the smallest economy in the bloc, South Africa may not want to give up its privileged position as the representative of Africa. Nevertheless, if Zimbabwe were able to fulfil its full economic potential as a result of BRICS membership, this could provide resources and offer good returns on investments for the other members, including South Africa.

A Poor Country With Rich Potential  

Making better use of its mineral wealth would certainly be a smart move. Zimbabwe is blessed with some of the best mining resources in the world. But due to sanctions, much of Zimbabwe’s gold must be smuggled out of the country. This has led to the development of gold smuggling cartels, operating between South Africa and Dubai, and suggests sanctions are promoting organised crime rather than producing political change for the benefit of ordinary Zimbabweans.  

Zimbabwe produces gold, platinum, diamonds, lithium, copper, cobalt, and nickel. The country’s rich nickel deposits could become an excellent source of revenue as nickel faces high demand and tight supply dynamics due to its use in the battery technology crucial to the adoption of electric vehicles.

Maximising the economic returns on its mineral resources could help bolster Zimbabwe’s economy while strengthening the BRICS monopoly in battery metals, currently dominated by China, the world leader in both rare earths and lithium refinery.

Agriculture is another area where inclusion in BRICS could assist Zimbabwe’s economic recovery. The destruction of Zimbabwe’s agricultural sector is well known as white farmers were evicted from their farms without compensation. Besides this being a cautionary tale for South Africa, it remains a great economic tragedy for a country that used to be considered the breadbasket Africa.

The good news is that corn production in Zimbabwe recovered to its mid-1980s highs in 2021, while wheat production finally returned to near its 1998/1999 all-time highs in 2022. The BRICS offer large markets for Zimbabwean agriculture exports to encourage increased production. China could also provide development finance and machinery while Russia could support Zimbabwe with fertilizers.

In light of recent spikes in food prices, food security is becoming a greater priority for the BRICS, and although China seeks self-sufficiency in grains and seed oils, as the world’s largest food importer, China will still require massive volumes of food imports for the foreseeable future. The seasonal differences between the hemispheres, and differing climatic conditions, could also support inter-BRICS agricultural trade due to the different crop types and harvest times between BRICS countries.

Financial Alternatives

While mining and agricultural are the keys to unlocking Zimbabwe’s full economic potential, the most attractive aspect of BRICS membership for Zimbabwe may be the development of alternative payment systems to avoid sanctions. The government official who mentioned Zimbabwe’s interest in joining the BRICS made specific reference to the development of alternatives to the SWIFT payment system.

The inclusion of sanctioned countries like Iran, Zimbabwe, and Syria within BRICS may accelerate the development of de-dollarized alternative financial systems, but this would also risk making the BRICS appear anti-Western. As every country in the bloc (except Russia) is still reliant on the West for the majority of its export revenue and foreign direct investment, this will be a crucial juggling act for the BRICS to manage as they seek to expand the bloc’s membership.

As a historical ally who supported its independence movement, and the largest importer of Zimbabwean platinum and tobacco, China may support the inclusion of Zimbabwe in BRICS. Meanwhile, although former Zimbabwean president Robert Mugabe had strained ties with the Soviet Union, present-day relations between Zimbabwe and Russia continue to strengthen.

The Kremlin has shown a strong commitment to fostering closer ties with African nations, especially in light of Western attempts to isolate the Russian Federation. China, similarly, has developed deep relationships with numerous African nations. As such, Zimbabwe's inclusion in BRICS could provide a valuable opportunity for both Russia and China to further expand their influence on the continent.

South Africa, on the other hand, may be less enthusiastic. BRICS membership amplifies the voice and prestige of South Africa among emerging markets, and much of our importance is derived from our position as the only representative of the African continent in the bloc. If Zimbabwe and other African states are permitted to join, South Africa would no longer be the sole voice of Africa within the alliance.