The new world order known as BRIC, a group acronym referring to Brazil, Russia, India, and China, has been trying to take over economic dominance from the West and have more sovereignty and autonomy. 

The acronym BRIC created in 2001 was predicted to be one of the biggest economies in the 21st Century. South Africa joined BRIC in 2010 making up the acronym ‘BRICS’ which spurred other predictions of BRICS replacing the US and Europe and with their total share of global GDP exceeding 50%. BRICS having formed a geopolitical forum has provided an alternative to the G7 which comprises advanced economies; Germany, France, the United Kingdom, Italy, Japan, Canada and the US as members, as well as the EU.

BRICS’ efforts in getting rid of the West economic dominance in the International Monetary Fund (IMF) and the World Bank and being frustrated by the inability to hold top job positions of these top financiers launched the New Development Bank headquartered in Shanghai, China in 2014. BRICS began with a capital of $50 billion and in 2015 created a liquidity mechanism called the Contingent Reserve Arrangement (CRA). The CRA seeks to support members by providing short-term liquidity through currency swaps to help mitigate the Balance of Payment crisis (UPSC 2021). The CRA is a competitor to the IMF and has positioned BRICS as an economic group with the ability to finance infrastructure projects in the developing world.

Individual member states of BRICS have already begun financing infrastructure projects in Africa. For instance, China and Africa bilateral relations keep increasing and strengthening as China’s presence in African countries continues to grow. China is currently the biggest lender to Africa under the Belt and Road Initiative surpassing the US.  During the 2021 Forum on China-Africa Trade Cooperation, China’s President Xi pledged USD 40 billion to finance African infrastructure projects as part of China’s Belt and Road Initiative and the China-Africa Cooperation Vision 2035. In addition to the funding of projects, there exist mutual benefits, China imports natural resources and agricultural goods from Africa which in 2021 amounted to USD 254 billion.

Other member states have also had a footprint in Africa, the bilateral relations between India and Africa have supported the development of small and medium-scale enterprises whereas, Brazil and Russia have been heavily involved in the mining and energy industry in Africa through public-private partnerships. (AfDB, 2013) Funding of infrastructure projects in Africa will enhance trade under the African Continental Free Trade Agreement (AfCFTA) by strengthening African economies. BRICS and AfCFTA partnership with BRICS will enable the development of sustainable projects that boost sustainable trade and the connection of the region to other advanced economies.

Kenya’s engagement with BRICS, more so with the individual member states, has huge potential in terms of economic development and market access of over three billion people through the export of its natural resources, and agricultural goods among others. This enhances global competitiveness. In reciprocity, Kenya will also likely benefit from foreign direct investment and the transfer of knowledge in technology from trading with the BRICS.

In terms of availability of funding, Kenya can access alternative international finance arrangement models offered by CRA, especially for green infrastructure projects. Financing arrangement under BRICS CRA does not attach conditions on governance, economic policy, and institutional reforms as is the norm with funds from IMF and World Bank. China, for instance, emphasizes on non-interference of national sovereignty and development partners’ responsibility for their long-term development. (IDS 2013) China’s conditions are tied to aid, not to policy but through linking it to conditional purchases from the donor country or channeling credit lines directly to Chinese companies rather than recipient country governments. (IDS 2013) This policy of tied aid favours Chinese companies, while its loans are backed by African natural resources or key infrastructure such as ports. Therefore, there is a likelihood of China issuing loans to projects with high interests of its companies which are mostly state-owned.

This notwithstanding, Kenya enjoys strong, ongoing support from the IMF and the World Bank, however, it will likely face a potential crunch come June 2024 when the ten-year Eurobond, worth USD 2 billion, will need repaying unless a refinancing model will be made available. In addition, to the tied aid policy, the political instability of the BRICS, and the dependance on the US dollar, the CRA is not the best alternative for African countries as their projects are mostly short-term. It should also be noted that China lends with the US dollar and with the current global inflation most African countries including Kenya have their currency weakening against the US dollar which further increases the balance of the loans owed by them.