According to a post shared on X formerly known as Twitter, on Friday, by BRICS (Brazil, Russia, India, China, and South Africa) an international organization, Nigeria plans to join the union in international trade.
The post reads “Nigeria will apply to join BRICS in 2024,”
BRICS operates as an organization that seeks to further economic cooperation amongst member nations and increase their economic and political standing in the world.
BRICS offers opportunities for companies to expand their operations into foreign markets. They provide opportunities for foreign expansion for companies and attractive returns for institutional investors.
According to BRICS, the combined GDP of their nations accounts for 31.5% of global GDP as of 2023, compared to the 30.7% of the G7 nations.
In the past, Vice President Kashim Shettima attended the 15th BRICS Summit in South Africa. He stated that Nigeria had not applied to join the economic bloc. The BRICS group is considered to be a contrast to Western powers like the United States.
Nigeria becoming a member of the organization would enable it to trade its major exporting product which is oil in Naira. This would boost the value of Nigeria currency thereby solving part of the country’s economy crises.
A human right activist Femi Falana previously advised Nigeria to join the BRICS economic union. He suggested that selling Nigerian crude to foreigners in naira rather than in US dollars could bolster the country’s currency.
In his words, “If I had my way, my own radical policy would be that: I would sell Nigerian gas and crude oil in naira. Let those who want to buy our products look for naira. That is how to promote your currency”
BRICS has been seeking ways to ditch the US dollar in trades facilitated among its members. For instance, India has reportedly started paying for Russian oil through rupee and ruble exchange. Falana believed that joining the bloc could be a way out of Nigeria’s struggle to save the naira from total collapse.
But economic experts have criticized this advice, saying that the Falana as a human rights lawyer, does not understand the economics of Nigerian trade.
According to them, Nigeria is currently experiencing a shortage of dollars, which makes it difficult to import goods. Selling oil in the local currency, the Naira, may not be as effective because a strong Naira can encourage more imports and deplete the country’s monetary reserves. It’s a complex issue that requires careful management of the economy.
China, with its vast manufacturing capabilities, still heavily relies on the US dollar for international trade. Even though Nigeria might consider moving away from using the US dollar, it may not have a substantial effect on the country’s economy.
