BRICS AND SUB-SAHARAN AFRICA TRADE INTERDEPENDENCE AND PEACE: EVIDENCE BASED ON REVEALED COMPARATIVE ADVANTAGES

  • Hailay Gebretinsae Beyene University of South Africa
Keywords: BRICS, economic integration, merchandise exportation, peace and stability, revealed comparative advantage, structural transformation, sub-Saharan Africa

Abstract

This study examined economic integration through trade between BRIGS (Brazil, Russia, India, China and South Africa) countries and sub-Saharan Africa. The study examines the comparative advantages of the two economic blocks with respect to the exportation of merchandise (food, agricultural raw materials, fuels, ores and metals, and manufactures). The findings of this study reveal the actual status of these two regions as economic partners in each of the five subsectors of merchandise exports.

The  trend  shows  that,  with  the  exception  of  manufactures  exports, the competitiveness of all subsectors of the merchandise  exports of  BRIGS is characterised by a  declining  trend.  BRIGS has  a  comparative  advantage in the world in the exportation of manufactures and fuels, and comparative disadvantage in the export of food, agricultural raw materials, and ores and metals.  Interestingly, manufactures are  continuously  and consistently  in a steadily rising trend. This is evidence that BRIGS's structural transformation towards higher valued-added commodities is proceeding well, which means that policy makers should be considering ways of enhancing it further.

In the case of sub-Saharan Africa, with the exception of manufactures exports, it is found to have comparative advantages in all merchandise exports. Sub- Saharan Africa’s competitive advantage is the highest in the exportation of ores and metals, followed by fuels, agricultural raw materials and food. Sub-Saharan Africa has a comparative disadvantage in the export of manufactures throughout the period considered in this study. This implies that the prospects of structural transformation to downstream of the higher value-added commodities export part of the supply chain are good: the slow pace of transformation towards higher value-added goods should therefore be demanding the attention of policy makers. The study has revealed that sub-Saharan Africa is more competitive than BRICS in the exportation of ores and metals, fuel, agricultural raw materials and food. On the other hand, BRICS is more competitive than sub-Saharan Africa in the export of manufactures.

The study has also revealed that significant economic integration can be sustained  between  BRICS  and  sub-Saharan  Africa  in  the  exportation  of all merchandise subsectors. Specifically, sub-Saharan Africa is a potential destination market for BRICS’s exports of manufactures. Conversely, BRICS is also a potential destination market for sub-Saharan Africa’s exports of ores and metals, fuel, agricultural raw materials and food.

Economic integration between BRICS and sub-Saharan Africa favourably influences peace and stability in the regions. Sustaining peace and stability in these regions also favourably influences the wellbeing of the communities.

Author Biography

Hailay Gebretinsae Beyene, University of South Africa

Department of Management

Associate Professor

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Published
2015-07-29
Section
Articles