New bank offers Africa support beyond financing

Continent's geopolitical ambitions may get huge boost

As planning proceeds apace for the new development bank being set up by the BRICS economies to become fully operational, it continues to catch the imagination of much of Africa.

Brazil, Russia, China, India and South Africa signed the deal to establish the bank in July, and once it is running it will be able to expand the infrastructure capacities of emerging economies internationally.

This bold effort from an increasingly influential group of countries will offer a good alternative to today's multilateral development-financing institutions.

The new bank is expected to start lending in about two years, and it could play a pivotal role in accelerating Africa's geopolitical ambitions. First and foremost, the institution will have the financial wherewithal to level the global development-financing playing field as a result of its diverse leadership structure.

The bank's principal member, China, is on track to become the world's foremost economic force this decade, and the other BRICS members have the economic capacity to follow in its footsteps. Given the rapid growth of the BRICS over the past 10 years and their share in world economic output (about 25 percent and rising), the new bank will serve not only as a much-needed alternative to the World Bank, but as a lever for pressuring advanced economies to deliver on their commitments to the developing world.

In addition to more than $120 billion committed in combined BRICS investments in strategic sectors such as natural resource extraction, manufacturing, services and information technology, the new bank's initial $50 billion lending pool will prospectively facilitate supplementary capital inflows into Africa and ensure increased volumes of long-term infrastructure capital commitments. With an agenda no doubt modeled after China's "Africa first" policy, the new bank will allow the continent's leaders to select their economic partners from a larger pool of interested parties, thereby broadening the negotiating capacity of the continent's public stakeholders.

However, beyond financial and economic gains, the China-led bank will bring additional good news to Africa by solidifying strategic links. As the BRICS members continue to transform both economically and politically, they will undoubtedly seek enhanced relations with Africa. This will provide an opportunity for the continent to study the policies and best practices that have made these countries so successful, while forging synchronies with partners that boast high influence worldwide.

While such support will be developed through increased collaboration with China in particular, another huge asset is at BRICS' disposal: Russia, which has been silently designing a strategy for the continent. Although Russia has yet to announce an official investment push in the continent, Russian companies operating in Africa have seemingly become aware of the tremendous opportunities. Some top Russian firms are engaged in strategic projects, Alrosa in Angola, and Severstal and RUSAL in Guinea being prime examples. Moreover, as Russia seeks alternative partners against the backdrop of its ideological rift with the United States and Europe, Africa will afford Russia both profit from mutually beneficial trade and immense return from exporting goods to large, growing consumer markets.

A clear recent signal of Russia's interest in advancing its economic engagement in Africa was Foreign Minister Sergei Lavrov's trip to Zimbabwe in September, when he signed a $3 billion deal to develop the country's platinum resources. The sheer size of the deal - the largest Zimbabwe has seen since independence over 30 years ago - speaks volumes about Russia's approach to doing business in Africa.

Indeed, the new bank's establishment comes at a momentous time for its founders and for Africa. The world desperately needs further options for its development agenda, and China and the other BRICS members offer the requisite experience, knowledge and resources to continually improve this state of affairs. As long as China, the group's principal member, does not repeat the mistakes the United States made vis-a-vis the World Bank and the International Monetary Fund, the new bank could offer a compelling alternative to today's existing multilateral system, which has time and again struggled to fulfill the world's development objectives.

Africa is now set to benefit from additional development-financing options such as the new bank and a more integrated BRICS coalition. However, the continent needs to do its own part as well. As African leaders prepare to engage with such new institutions, they need to ensure that their governments aggressively pursue their quest for modernization, efficient management and transparency. If this is the path that they ultimately choose to follow, the BRICS and Africa could well form the key partnership of the 21st century.

Francis Ikome is the founder and president of the Cameroonian American Chamber of Commerce. Marshall Comins is the press and investor relations director of the Kirishi-2 Oil Refinery, Russia's first "waste oil" refinery set to launch in 2017. They are managing partners of the Africa Investment Agency. The views do not necessarily reflect those of China Daily.