Accelerating Growth with BRICS: Funding and Partnerships in 2024
A Spaghetti Junction of Evolving Economies
Originating from the acronym coined in 2001 by economist Jim O’Neill of Goldman Sachs, BRIC represented Brazil, Russia, India, and China — nations identified for their rapid growth and potential to become larger players in the global economy. The addition of South Africa in 2010 expanded the group to BRICS, bridging another continent into this coalition.
Over the years, BRICS has transitioned from a theoretical investment idea to a tangible entity with substantial influence on the global stage. This evolution was marked by the inaugural meeting of BRICS foreign ministers in 2006, followed by the group's first leaders’ summit in 2009. The grouping has since asserted itself through cooperation in various international forums, including the World Trade Organization, aiming to amplify its collective voice against the backdrop of a US-dominated global order.
The recent decision to invite Saudi Arabia, Iran, Egypt, the United Arab Emirates, Argentina, and Ethiopia to join this year signifies a strategic expansion. This move not only broadens the bloc's geographic and economic footprint but also positions it as a formidable counterbalance to traditional economic powers. With some of the world's leading energy producers joining forces with major developing consumers, the expanded ‘BRICS+’ is poised to enhance its economic leverage and potentially challenge the US dollar's hegemony in oil and gas trading by adopting alternative currencies.
At the 15th annual summit, it was highlighted that the BRICS countries now contribute 32% to the global economy, surpassing the G7’s 30%. This is a testament to the bloc's growing influence, with projections suggesting that its share of global GDP could exceed 50% by 2030. The significance of BRICS extends beyond global economics to offer new opportunities for business, especially for small and medium-sized enterprises (SMEs) in these regions. The expanding middle class within BRICS nations presents fertile ground for business growth, underlining the importance of this economic alliance in the global landscape.
Today, we're unlocking these vibrant markets with a special focus on empowering Small and Medium-sized Enterprises (SMEs) aiming to expand their network of partners and secure new investments.
What Advantages Do Businesses Have to Gain in Terms of BRICS Partnerships?
The primary benefit for SMEs lies in the access to large and growing markets across the BRICS nations. For South African businesses, for instance, this means an opportunity to export goods and services to these countries, leveraging agreements like the African Continental Free Trade Agreement (AfCFTA) which promotes free trade across the continent.
Next, the expansion of the BRICS bloc is set to dramatically increase intra-trade among these countries. Trade within the BRICS is expected to constitute 40% of their total trade by 2030, a significant rise from 25% in 2022. This increase is facilitated by preferential trade agreements and efforts towards supply chain diversification, offering a robust platform for SMEs to engage in higher volumes of trade. In 2022, trade among BRICS countries reached a record $135 billion, showcasing the growing economic interconnectivity within this bloc.
Another advantage for SMEs is the focus on fostering new technologies within the BRICS nations. The adoption of the Gqeberha Declaration during the BRICS STI Ministerial Meeting underscores this commitment, aiming to enhance cooperation in fields such as materials science and nanotechnology. Furthermore, infrastructure and technological initiatives, such as China’s renewable energy investments and India’s booming tech startup ecosystem, present lucrative opportunities for SMEs. China’s Belt and Road Initiative (BRI), for instance, opens up prospects in construction materials, engineering services, and logistics, highlighting the diverse opportunities available within the BRICS economies.
The BRICS nations are rich in expertise across a diverse range of industries, from technology and cryptocurrency to government and finance. For SMEs, this translates into unparalleled access to knowledge and best practices through direct partnerships or participation in significant events such as the SBN forum 2024.
The forum promises to connect businesses with leading figures such as Tumelo Ramaphosa, CEO of StudEx Group, Talal Tabbaa, CEO and Co-Founder of CoinMENA, and HH Sheikh Salem bin Sultan Al Qasimi, a member of Ras Al-Khaimah’s ruling family. Engaging with such industry leaders offers SMEs insights into the latest trends, technological advancements, and market opportunities, enriching their strategic outlook and operational capabilities.
Lastly, the BRICS economies are witnessing substantial private wealth growth, with China leading the pack, followed by India, the UAE, Saudi Arabia, and Ethiopia. This surge in wealth, particularly among high-net-worth individuals (HNWIs), presents a promising avenue for those seeking investment.
The substantial increase in millionaires and billionaires within these economies over the past decade underscores a growing pool of potential investors and partners for emerging businesses. The BRICS Wealth Report highlights the dynamic nature of these economies and their role in shifting the global economic landscape.
Indeed, BRICS investors are welcoming opportunities with their arms wide open, so what’s the best way for a business to get involved?
Attracting BRICS Funding – The Hard Way
For businesses looking to leverage the economic dynamism of the BRICS nations, a range of funding avenues are on offer.
1. BRICS Business Council Initiatives
A pivotal platform for fostering business collaboration across the BRICS countries is the BRICS Business Council. Formed during the fifth summit in Durban, the council aims to enhance trade and investment ties among member countries and offers SMEs an array of support services.
These include matchmaking with potential business partners, specialised training programs, and direct access to financing options. A notable development from a recent summit is the signing of a R10 billion funding framework agreement between the Industrial Development Corporation (IDC) and the Bank of China (BoC). This agreement focuses on supporting projects across various sectors, including energy, mining, manufacturing, agriculture, and infrastructure, presenting a significant opportunity for SMEs in these fields.
2. Funding Through the New Development Bank (NDB)
The New Development Bank, previously known as the BRICS Development Bank, stands as a cornerstone for financial support, particularly in infrastructure and sustainable development projects within emerging markets. SMEs engaged in these sectors can seek out loans and financial assistance from the NDB, enabling them to undertake growth and expansion projects with a sustainable focus.
3. Government-to-Government Support Programs
Another channel through which SMEs can secure funding and support is via government-to-government programs. These initiatives, designed to foster trade and investment between BRICS nations, offer a comprehensive package of benefits, including financing options, technical assistance, and access to a broader network of business resources. These programs exemplify the collaborative spirit of the BRICS nations and their commitment to mutual economic upliftment.
4. Engagement with Private Sector Investors
Within the BRICS economies, there's a marked interest from private sector investors in backing SMEs. These investors are on the lookout for innovative businesses with growth potential. SMEs can tap into this investment pool either by directly approaching potential investors or by partnering with financial intermediaries that specialise in facilitating such connections. This route offers a direct link to capital, along with the possibility of mentorship and strategic guidance from experienced market players.
Attracting BRICS Funding – The Easy Way
Networking at industry events may fasttrack many of those processes a business would usually have to go through when attracting investment.
With this in mind, the SBN Forum 2024 has been meticulously crafted to simplify the process for companies of various sizes that are seeking investment, especially those that are looking to leverage these investments to capitalise on future partnership opportunities within the BRICS economies. Let’s explore this idea.
Building Meaningful Relationships: The SBN Forum 2024 serves as an ideal venue for networking with BRICS businesses and organisations. The event brings together a diverse array of leaders, policymakers, and experts from the BRICS regions, enabling attendees to expand their professional networks with potential investors, partners, and clients. The forum's multifaceted networking approach, including casual evening sessions and structured matchmaking events, lays the foundation for enduring professional relationships.
Engaging in BRICS-centric discussions and learning opportunities: For those looking to make an impact within the BRICS economies, the forum offers a blend of matchmaking sessions, quick-fire panel discussions, and opportunities for direct engagement with market leaders and investors, enhancing visibility and opening doors to potential funding sources.
Craft a Compelling Business Plan: A well-structured business plan, complete with sound financial projections and a clear value proposition, is indispensable. The SBN matchmaking and mentorship opportunities underscore the importance of being prepared to present your business in the best light. Engaging with experts and potential investors during these sessions provides a chance to receive direct feedback and fine-tune your approach, making your proposal even more compelling.
In light of that aforementioned, the SBN Forum 2024 emerges as somewhat of a fasttrack for businesses looking to attract not just investment, but meaningful partnership opportunities within the BRICS economies.
Final thoughts
In wrapping up our dive into the world of BRICS, it's clear we're looking at an exciting period of growth that shouldn't be overlooked. This group — Brazil, Russia, India, China, and South Africa among others — is like a major crossroads in the global economy, opening doors to new markets, higher trade volumes, cutting-edge tech, and solid financial support, all of which are gold mines for small and medium-sized businesses aiming to scale up.
But it's not just about finding the right partners. The scene is ripe with investment opportunities for venture capitalists, angel investors, and startups at various funding stages. And here's where the SBN forum comes into play, acting as a key player in speeding up these partnerships and investment connections.
For anyone looking to make their mark in the BRICS economies, this is your fasttrack opportunity — time to jump up and get involved.