In a recent development, BRICS members Russia and South Africa decided to use their own currencies instead of the US Dollar in a significant $265 million oil deal. Gazprombank, a Russian bank, was chosen for a large gas refinery contract in this deal.
This move will begin to see a trend forming on the African continent as more and more deals will be brokered in local currencies. Over reliance of USD is affecting the ease of doing business. In a recent speech, the President of Kenya William Ruto said there was no rationale behind African countries transacting in USD rather than an agreed regional currency, he cited that use and over reliance of the USD was stifling Africa growth.
While the currency details aren’t specified, it seems likely to be in local currencies due to Gazprombank being under US sanctions. This approach helps Russia reduce its reliance on the dollar, allowing for more business opportunities despite sanctions.
The BRICS alliance has been focusing on using local currencies as part of its policies, especially with increased engagement with Russian financial institutions. Continuing this trend, South Africa and Russia, key members of BRICS, have agreed on a substantial $265 million oil deal without involving the US Dollar.
Gazprombank is partnering with South Africa for a new gas refinery agreement, selected from a group of 20 bidders after disqualifying 19 on a technicality.
BRICS has had a good year, marked by overall growth. During the 2023 Annual Summit in August, the alliance expanded by welcoming new members such as Saudi Arabia and the United Arab Emirates (UAE) into its operations.
