Discussions between Brazil, Russia, India, China and South Africa (BRICS) during the 2023 summit held in Johannesburg South Africa, particularly proposals to introduce own currency will not threaten Botswana and South Africa economic ties, economists say.
The leaders of trading bloc which account for 32 percent of the global Gross Domestic Product (GDP) have discussed that BRICS should adopt its own currency to reduce dependence on the US Dollar.
Vice president Slumber Tsogwane led Botswana delegation that attended the three-day summit which have attracted different leaders from Africa as BRICS has opened up for new membership subscriptions.
With South Africa being the largest trading partner of Botswana, local economists said the introduction of BRICS currency will be of significant opportunity for Botswana to trade with.
In an interview, Head of Faculty of Commerce at BA ISAGO University Dr Oscar Chiwira said basically before considering to join BRICS, there is a need to be familiar with principles that established BRICS.
He said if the principles are in line with the national economic and social policies including the national vision, then if Botswana considers to become member of BRICS will augment these development drivers.
“There is also need to harmonization of both fiscal and monetary fundamentals so as to establish their congruency with the current regional and international integration partnership arrangements. For example, USA is not part of this group, African Growth and opportunity Act (AGOA), joining BRICS what impact it will have for Botswana regarding,” said Chiwira in an interview on Friday.
Another economist Dr Mosimane Rammika- Research Fellow at Fine Analytics developments unfolding in BRICS will not impact Botswana/ South Africa economic ties in any bad manner.
He said we have south Africa as our major trading partner from far with common understandable socio-economic interests with that in mind we do not projects hindrances that may disturb the relationship.
“In other front, we have South Africa in the BRICS not ripping benefits as expected more so it’s a small economy compared to other members. Since joining in 2010 it is still undergoing several protocol implementations which will results in benefits. The question is whether if we were to join as Botswana, are we still inviting more of our implementation challenges which we are currently facing in most platforms as well in our own economist microstructures,” he stressed.
Furthermore, Dr Rammika has indicated that the introduction of the bloc currency cannot be down overnight and not feasible in the short term or it may be in their long-term strategy as work in progress.
“The development of currency with own complications such as clearing and settlements centers in view of capital market management to advance the use of the currency to world standard in which Euro from the European Union (EU) block has gone through or still going now,” he added.
Rammika noted that he doesn’t Botswana having transaction problem with South Africa in using local currency as BRICS encourage use of local currency more so that Botswana Pula and South African Rand are liquid in both countries, adding that this easily boosts trade among two countries.
He also said at the moment China enjoys ninety percent of trade in BRICS and ten percent is a share of other countries and so one may ask the significance of Botswana if could join BRICS.
During this year’s summit some of the countries that have shown interest to join BRICS starting next year include Egypt, United Arab Emirates (UAE), Argentina and Iran just to mention a few.
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