In the first half of 2024, Nigeria’s foreign capital inflows from BRICS countries increased by 189% as the country continues to work to gain membership in the enlarged BRICS alliance.
Capital imports from the BRICS nations increased from $438.72 million in the first half of 2023 to $1.27 billion in the same period of 2024, according to an examination of data from the National Bureau of Statistics (NBS).
On January 1, 2024, the BRICS group—originally made up of Brazil, Russia, India, China, and South Africa—officially welcomed five new members: Saudi Arabia, Iran, Egypt, Ethiopia, and the United Arab Emirates (UAE).
Argentina was invited but chose not to join, bringing the total number of members to 10.
Despite not being included in this wave of inclusion, Nigeria is determined to join the club within the next two years because it sees the potential benefits of increased trade and investment flows from being a member of BRICS.
What The Data Indicates
South Africa and Saudi Arabia were the main drivers of the BRICS capital influx boom, accounting for the biggest gains in H1 2024.
From $228.09 million in H1 2023 to $838.32 million in H1 2024, inflows from South Africa increased by a staggering 267%.
South Africa’s prominent position in capital flows, particularly in consumer goods, telecommunications, and financial services, suggests strong bilateral ties.
Capital inflows to Saudi Arabia, a recently admitted BRICS member, increased dramatically over the same period, from a meagre $0.03 million to $147.07 million.
In a similar vein, China, a very little investor the year before, increased its capital imports into Nigeria from $0.25 million to $35.64 million.
China’s global Belt and Road Initiative, of which Nigeria is a major player, aims to improve commerce and infrastructural networks throughout Africa and is responsible for the country’s increasing investments.
Inflows from the UAE, one of the recently admitted BRICS members, increased from $209.41 million in the first half of 2023 to $245.19 million in 2024.
The strengthening economic linkages between Nigeria and the Gulf states – particularly in commerce, infrastructure, and energy – are reflected in these inflows.
In Nigeria, 50% Of The BRICS Countries Have Zero Foreign Capital
In H1 2023 and H1 2024, half of the BRICS countries did not record any foreign capital inflows into Nigeria, despite a general increase in investments from BRICS members.
Brazil, Russia, Iran, Egypt, and Ethiopia are some of these nations. Despite being part of the BRICS coalition, these countries have not made any capital investments in Nigeria during the period under review.
Numerous causes, such as divergent economic interests, regional focus, or geopolitical considerations that can affect their investment plans could be to blame for this lack of influx.
What To Note
According to reports, Nigeria’s Minister of Foreign Affairs, Yusuf Tuggar, stated in November last year that the country intends to join the G20 and the BRICS economic bloc within the next two years.
According to the Minister, Nigeria satisfies the requirements to join groups such as the G20 and BRICS, citing the size of her people and economy as an appropriate criterion.
While attending the BRICS conference in South Africa last year, Nigeria’s vice president, Kashim Shettima, did not pursue membership when the bloc accepted new members, including two African nations, Ethiopia and Egypt.
Tuggar, the Foreign Affairs Minister, reaffirmed the nation’s desire to join the powerful economic group known as BRICS, which is made up of China, South Africa, India, Russia, and Brazil, in September of this year.
Although Nigeria has not yet submitted a formal application to join BRICS, Tuggar clarified that the nation would do so “at the right time.”
He pointed out that the Bola Tinubu administration is considering joining the alliance.