By Dagnachew Tesfaye, DMLF Managing Partner
Ethiopia has been accepted to join the BRICS family starting from January 1/2024. Together with Ethiopia, Saudi Arabia, Argentina, Egypt, Iran and UAE have also joined the BRICS family. This is part of the BRICS expansion process, said Cyril Ramaphosa, South Africa President. PM Dr.Abiy stated on the announcement that Ethiopia joined the BRICS family due to the fact that Ethiopia’s multi faceted ancient history, huge population with the majority being young and potential for fast economic growth. Green legacy and wheat production were the quintessentials of such potential economic growth. The support of China has been praised together with India and Russia. China even took the step to render a one year grace period for 2023-2024, on all debts Ethiopia has to discharge to China. Science, Military, Trade and Investment deals were also signed with India.
BRICS is an intergovernmental organization that has the core purpose of enhancing political and economic ties among member states. Bilateral relations among BRICS are treated in majority of the cases with the aim of non-interference, equality and mutual benefit. The colonial and unequal world order has been blamed by many to slow down economic development of the developing nations.
BRICS encompasses the New Development Bank(NBD), which assists public and private projects through loans, guarantees, equity participation and other financial instruments. Ethiopia, being a member of BRICS, shall benefit through NBD for its public projects on the pipeline.
In addition to NBD, BRICS has initiatives namely BRICS Contingent Reserve Arrangement (CRA) which is an arrangement for rendering support through liquidity and precautionary instruments in response to actual or potential short term balance of payments pressures. The CRA is considered as a version of the International Monetary Fund (IMF). Moreover BRICS has initiatives of the BRICS Payment System, the BRICS Joint Statistical Publication System and BRICS basket reserve currency.
The latest expansion of BRICS from 5 countries to 11 is aimed at strengthening South-South Cooperation and building a multi polar order that is treated on the basis of non-interference, equality and mutual benefit.
The Ethiopian government has applied, done the diplomacy and met the requirements for being a member of the BRICS. The House of People’s Representatives is expected to ratify the BRICS accession.
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