Afrasianet - Mohamed Zakaria Fadl - On a cold Johannesburg winter night, August 2023, South African President Cyril Ramaphosa took to the podium at the fifteenth BRICS summit, carrying in his tone what appeared to be more than an official statement, announcing, on behalf of the five founding countries, a historic decision to expand the membership of the bloc to include six new countries: Egypt, Ethiopia, Saudi Arabia, the United Arab Emirates, Iran and Argentina.
Not only was the announcement surprising; it seemed to break expectations. In a hall full of cameras and observers, the impact of the added names went beyond mere expansion, and seemed to open the door to another financial system, or at least rearrange the map of global economic influence.
Between protocol speeches and media lenses, there were whispers of alternative currencies, a new financial order, and terms such as "freedom from dollar dominance" and "global monetary rebalancing."
The language has been cautious, but deep down it foreshadows a shift beyond geographical alliances; it's talk of the global South when it prepares to get out of the dollar collar. Or at least rethink his relationship with him.
The words weren't loud, but they said a lot. In essence, it was a silent declaration that the global South, with Africa at its core, was preparing for the post-dollar era.
For decades, the dollar is no longer just a currency; it has become a tool of hegemony that reflects deeply on the economies of African countries that are gasping for its volatility in the absence of independent monetary policies. In this context, BRICS offers attractive alternatives, from unified payment systems to financing in non-Western currencies, but it raises fundamental questions: Is it possible to break free from dependence by entering into another dependency? Does Africa have a self-contained monetary project, or is it still moving within the maps of others?
Accordingly, this article attempts to approach this defining moment, not only from the portal of financial analysis, but also to the question of sovereignty itself. He starts from the reality of the deep-rooted monetary imbalance, then reflects on the tools and potential of BRICS, and finally tries to slow down on the most serious question, perhaps dismounting around it: Are we really living the beginning of Africa's exit from the orbit? Or are we just switching the direction of dependency? Not their nature?
Tight currency. and the breadth of dependency
Deep in the African monetary landscape, the dominance of the U.S. dollar is a central factor constraining many countries' ability to achieve independent economic stability. The experiences of many countries, such as Egypt, Nigeria, and the CFA franc zone, show how excessive dependence on the US currency exposes these economies to external fluctuations that hinder sustainable development efforts.
In Egypt, the Egyptian pound witnessed a series of sharp depreciations, most notably in January 2023 by 40%, followed by the currency float in March 2024, which led to a depreciation of $ 0.02. These changes have led to higher import costs and increased inflation, negatively affecting the purchasing power of citizens. Moreover, the foreign currency crisis has worsened, prompting the government to seek $3 billion in IMF loans.
In Nigeria, the value of the naira has declined significantly, falling by 47 % from 770.38 naira to the dollar in 2023 to 1,470.19 naira in 2024. This decline has increased the external debt burden, as total external debt rose to $42.5 billion at the end of 2023, increasing debt servicing costs and impacting the country's financial stability.
In the CFA Franc zone, which includes 14 African countries in the center and west of the continent, a currency pegged to the euro is used at a fixed exchange rate. These countries are required to deposit 50% of their foreign exchange reserves with the French treasury, limiting their sovereignty over their monetary policies. This system restricts economic development and boosts capital flows to Europe, weakening their ability to achieve sustainable economic growth.
Globally, some countries have begun to take steps to reduce dependence on the dollar. For example, China and Brazil have agreed to use their local currencies for trade, and Russia has begun to use the Chinese yuan for some of its trade transactions. These moves show a growing desire to reduce the dollar's dominance.
In this context, the BRICS initiatives emerge as an opportunity for African countries to strengthen their monetary sovereignty. However, the success of these initiatives depends on the ability of countries to develop strong financial institutions, promote regional integration, and develop a clear vision of monetary sovereignty. Without these steps, these alternatives could become a new dependency, reproducing the same previous imbalances, but with different tools.
True liberalization is not only achieved through the adoption of new alternatives; it requires building an internally-coherent African monetary system, based on strong institutions, effective regional integration, and a clear strategic vision. Through these foundations, the continent's countries can achieve true monetary sovereignty and avoid falling into the trap of dependency in new colors.
When the BRICS whispers in another language
The BRICS seeks to offer alternatives to the global financial system dominated by the US dollar by developing new financial instruments aimed at strengthening cooperation among member states and reducing dependence on Western currencies.
Among these tools is BRICS Pay, a blockchain-based digital payment platform that aims to facilitate cross-border transactions between member states using their local currencies, reducing the need for dollars in international settlements.
Reports indicate that nearly 160 countries may adopt this new system, reflecting the growing global interest in reducing dependence on the US dollar for international financial transactions.
The group is also studying the possibility of creating a single currency, known as the BRICS currency, as a means of exchange between member states, which would enhance financial independence and reduce exchange rate fluctuations linked to the dollar. Studies indicate that this currency may be supported by a basket of strategic goods, which gives it stability and real value in global markets.
In addition, BRICS has established the New Development Bank (NDB) to finance infrastructure and sustainable development projects in member countries, with a focus on providing loans in local currencies to reduce the risk of foreign currency fluctuations. In 2024, the Bank approved $1 billion in loans to South Africa for infrastructure projects and $200 million to support sustainable development projects in Egypt.
On trade, the BRICS seeks to promote the use of the Chinese yuan in trade transactions between member countries, thereby contributing to reducing dependence on the dollar, and enhancing the yuan's status as an international currency. The data also shows that the use of the yuan in BRICS trade has increased by 6% over the past four years, reflecting the growing trend towards diversification of currencies used in international trade.
For African countries, these initiatives are an opportunity to strengthen financial sovereignty and reduce dependence on the Western financial system (European and American). Egypt, for example, hopes that joining the BRICS will help attract investment and ease the foreign-currency crisis. Nigeria is seeking to benefit from the New Development Bank's financing to support infrastructure projects and economic development.
In contrast, these initiatives face many challenges, including the need for political and economic consensus among member states, the development of advanced financial and technical infrastructure, and ensuring the stability of the proposed single currency. There are also fears that these alternatives could lead to new dependency, especially given China's increasing dominance within the BRICS.
Thus, while the BRICS offers promising tools to enhance the financial independence of member states, the success of these initiatives depends on the ability of countries to cooperate and coordinate effectively, and to develop strong financial institutions that support these trends.
Disguised dependency or deferred independence?
As Africa seeks to break free from dollar dominance, BRICS initiatives emerge as potential alternatives, but these alternatives may carry new challenges, raising the question: Will these alternatives lead to actual monetary sovereignty, or will they lead to dependency in new colors?
One of the most significant challenges is China's growing dominance within the BRICS. According to a report by the East Asia Forum, China accounts for more than 70% of the group's GDP, giving it significant leverage in determining fiscal policies and directions. This concentration could lead to new dependency, as member states rely on China rather than the United States, limiting the autonomy of their economic decisions.
Despite the BRICS offering alternative tools and spaces for monetary manoeuvre, the real challenge remains within the continent itself. Africa, which includes more than fifty countries with different levels of growth, stability, and integration, lacks a solid institutional base on which to base initiatives to break free from monetary dominance.
World Bank reports show that weak financial infrastructure, multicurrency multicurrency, and lack of coordination between monetary and fiscal policies deepen fragmentation and weaken the possibility of building a unified or even functionally coordinated monetary system.
In West Africa, the franc continues to be tied to the French treasury as both a technical and a political constraint, while the countries of the East suffer from the pressures of market volatility and a shortage of foreign-exchange reserves; in the South, despite the flexibility of institutions as in the case of South Africa, dependence on speculative capital flows keeps stability vulnerable.
The problem, then, is not the absence of alternatives; the fragility of the ground on which they are supposed to be built. The real alternative does not come from outside the scene; it is from a courageous internal rearrangement that redefines the relationship with the market, with fiscal policy, and with the tools of regional coordination. However many paths of apparent dissociation there are, they will remain subject to reversal, unless structural questions are resolved first.
Waiting for sovereignty. no sincerely.
In a world where power is recasting, it is not enough for African countries to emerge from the specter of dollar dominance, if they are not able to stand in their own shadow. The problem was not only currency; it was the long distance between decision and source, between need and capacity, between dependency and initiative.
The Brix group puts new cards on the table, some of which hold the promise of more room for movement, but they are not complete if they are not read from the inside first. Windows alone do not make a difference if the walls are cracked, the institutions are weak, and visibility is absent or delayed.
Monetary sovereignty is not granted, nor imported; The AfCFTA is not just an economic integration project; it may be the only framework in which a map of true monetary independence can be written, in which will intersects with structure, politics with production, and interests with the future.
An Africa that aspires to liberalization is not enough to replace currency for currency; it is not enough to rewrite the terms of relations, not only with Washington or Beijing; but with itself first. Only they can make these windows doors to sovereignty, not just new corridors of old or new influence, the extent of which is not yet clear.
Afro-centric academic and researcher on African economic and social affairs