This alliance signifies a collaborative endeavour among five emerging economies aimed at fostering economic cooperation and development. Over the years, BRICS has solidified its position as a formidable presence in the global economy.
During the recent 15th annual summit held in Sandton, Stavros Nicolaou, the head of the Business Council, unveiled a significant milestone. BRICS countries now contribute a combined 32% to the global economy, surpassing the G7 group's 30% contribution to global GDP. Projections indicate that this bloc will expand to account for over 50% of global GDP by 2030. It's worth noting that BRICS is home to a growing middle class, presenting new business opportunities.
Small and medium-sized enterprises (SMMEs) should not underestimate the potential benefits of this economic alliance.
BRICS agreements can translate into these several advantages for SMMEs:
Access to Markets: BRICS countries offer large and expanding markets for South African goods and services. Collaboration with BRICS nations can facilitate the development of new products and services or expansion into these markets. An example is the African Continental Free Trade Agreement (AfCFTA), which aims to enable the free flow of goods and services across the continent while bolstering Africa's position in the global market.
New Technology: BRICS nations host various investment funds interested in supporting SMMEs. Seizing these opportunities can assist businesses in growth and developing new technologies.
Expertise: The BRICS countries possess a wealth of expertise across various fields. SMMEs can tap into this knowledge by partnering with BRICS businesses or participating in conferences and training events.
Now, let's address the critical question:
How can SMMEs secure funding from BRICS?
Here are several avenues available for SMMEs to access BRICS funding:
BRICS Business Council: Established during the fifth summit in Durban, the BRICS Business Council serves as a platform for businesses from BRICS countries to collaborate and promote trade and investment. It offers a range of programs and services to SMMEs, including matchmaking, training, and access to financing. A recent summit witnessed the Industrial Development Corporation (IDC) and the Bank of China (BoC) signing a R10 billion funding framework agreement to support energy, mining, manufacturing, agriculture, and infrastructure projects.
The New Development Bank (NDB): Formerly known as the BRICS Development Bank, this multilateral institution provides loans and financial assistance for infrastructure and sustainability development projects in emerging markets. SMMEs can apply for loans from this bank to fund their growth and expansion.
Government-to-Government Programs: BRICS governments extend various programs to encourage trade and investment among their nations. These initiatives provide SMMEs access to financing, technical support, and other valuable resources.
Private Sector Investors: Private sector investors within BRICS nations express interest in investing in SMMEs. SMMEs can directly approach these investors or collaborate with financial intermediaries to explore funding opportunities.
How to enhance the likelihood of securing BRICS funding?
Build Relationships: Networking with BRICS businesses and organizations is instrumental in discovering opportunities and establishing connections that may lead to funding.
Participate in BRICS Events: Numerous BRICS events take place throughout the year, particularly in South Africa. Attending these events offers an excellent avenue to meet potential investors and partners.
Develop a Strong Business Plan: Preparing a well-structured business plan with sound financial projections is indispensable for successful funding.
While challenges exist, including cultural, linguistic, legal, and regulatory aspects, they should not deter SMMEs. Staying informed about BRICS developments and adapting to changing market conditions remain crucial for SMMEs looking to leverage the potential benefits of this economic bloc.