With Donald Trump’s re-election as U.S. president for a second and final term, his combative approach—marked by tariffs, sanctions and threats against various nations, including BRICS members such as South Africa, China and India—has once again taken center stage.
In light of these escalating tensions, there is an urgent need for a shift in the global financial system—one that is not dominated by the U.S. and the G7. Given these circumstances, BRICS emerges as the strongest alternative.
Baptized BRICS by British economist and former commercial secretary to the Treasury UK, Jim O’Neill, to describe the intergovernmental alliance of Brazil, Russia, India, China and South Africa; the economic bloc has grown to 10 members since its establishment.
The original five members with the addition of Iran, Indonesia, Egypt, Ethiopia and the United Arab Emirates have come to be known as BRICS+. Saudi Arabia accepted the invitation to join the trade alliance but hasn’t yet confirmed membership. The union created a new category for prospective members called partners, one of which Uganda officially joined on January 1 2025.
At present, BRICS incorporates nine partner countries with many others queueing up to join the club. Now more than ever, the world is in need of an alternative to the financial status quo, and BRICS provides that. As presently constructed, according to the World Bank and IMF, the trade bloc covers 27 percent [$31.7 trillion] of the world’s GDP and controls 47 percent of the world’s population [3.8 billion], with its members producing nearly 44 percent of the world’s oil.
The trade alliance’s founding members started the organisation because they reasoned that the international financial landscape manned by the Bretton Woods institutions: World Bank and IMF, wasn’t favourable to developing countries. There was a need for an alternative to the existing economic order to reduce over-reliance on the US dollar which has been weaponized when sanctions are imposed on countries.
When targeted sanctions are enacted, entities find themselves with a dollar shortage because they aren’t selling to the US and its allies. This gravely affects their economies because there is no alternative trade bloc and some of these sanctions last decades; case in point, Iraq and Iran.
The creation of BRICS circumvents this barrier because countries can now trade among themselves with their local currencies, and not the dollar. For that reason, nations don’t have to dance to the tune of the West anymore because they [don’t] need their reserve currency to conduct business.
This has made the concept of BRICS appealing to rich countries like Saudi Arabia that export oil and earn trillions of dollars but have limited investment options besides the US and its allies. BRICS gives such countries the privilege to diversify their investments to other emerging markets that offer better growth prospects.
As a partner country, Uganda is an official trading partner with BRICS but will not be involved in the decision- making process until it becomes a full member. Even so, Uganda can make suggestions, and those suggestions will be listened to and considered, which has made the trading alliance popular for its equitability.
The obvious benefit of this confederation for Uganda is, that it’s going to tap into BRICS’ trading web seeing as 65 percent of trade in BRICS was done among member states. Furthermore, the Contingency Reserve Arrangement [CRA], which is a BRICS financial agreement to bail out associates in times of crisis, will be at Uganda’s disposal as opposed to the policy strings attached to loans from the IMF and World Bank where the US has majority voting rights.
Needless to say, the alliance’s bank — New Development Bank, offers a collaborative and less intrusive lending approach that respects the sovereign policies of nations unlike the Bretton Woods institutions. The association will facilitate the diversification of Uganda’s trade basket which is small. Market access will increase with more economic ties and Uganda will sell more to China and India, which are its biggest trading partners.
Economist, and head of trade and regional integration at the Economic Policy Research Centre, Dr Isaac Shinyekwa had this to say about Uganda joining BRICS, “When the Bretton Woods institutions [World Bank/ IMF] were formed in 1945, some countries weren’t on the radar, some weren’t even part of the global state like India and China; but now, these are global powers.
“For this reason, there’s a configuration in global, political and economic influence because of the monopoly of the powers of the past”.
Dr Shinyekwa adds that BRICS is offering something new and, as a country, Uganda is going to benefit from, “having improved economic cooperation, technology and innovation coming in investment opportunities, geopolitical influence, infrastructure development from countries where the World Bank didn’t do much”.
He continues to point out that, Uganda is to profit from various cultural and education exchanges with BRICS countries, in addition to the much-needed investment capital that will come from China, and other BRICS members.
“Uganda will benefit from BRICS’ proposed payment system which offers an alternative where international payments won’t be made in US dollars. Barter trade could come into play where payments may be made with valued natural resources”.
The senior research fellow argues that Uganda is going to benefit from the international governance reforms being championed by BRICS; a clear instance being the World Trade Organisation’s appellant system which arbitrates trade disputes between countries.
“The appeals committee of the WTO has been stalled by the US which opposes the arrangement and hadn’t sent representation, thereby stalling the work of the organ for lack of quorum. BRICS is advocating for reforms in this system. “The WTO has become a dysfunctional system which needs reform. With Uganda being a partner with BRICS, it can champion these reforms”.
Dr Shinyekwa continues to acknowledge that Uganda joining BRICS will likely attract backlash from the West which may respond with sanctions but, “Uganda must take the risk, and make conscious decisions that will favour it”.
This will not be without consequences for the US and its associates because with 27 per- cent of the global economy not transacting with the US dollar; its flow will reduce and this will force global reforms in the Bretton Woods framework which is dominated by the US, and the European Union. Institutions like the World Bank and IMF, won’t be in control of all the money in the international finance landscape anymore, because of the emergence of BRICS.
I reached out to the permanent secretary, ministry of Foreign Affairs, Vincent Bagiire for comment on the implications of Uganda being a BRICS partner, but there were no replies to my outreaches. Nevertheless, BRICS has made it clear that they are not looking to create a currency to replace the US dollar, but that hasn’t stopped the roar from the US with President Trump threatening 100 percent tariffs on the bloc’s countries if they ‘play with the dollar’.
Whether these threats are going to slow the alliance down, or justify the speeding up of an alternative financial centre is a question whose answers are currently unfolding in real time.
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In other words, the financial desperation is spreading like the realistic wildfire.
But in the philosophy things (what something is made of), BRICS is made up of “Second World” disgruntled countries, whose economies also depends on the US/West, which they want to pull down.
E.g. the substantive Chinese Industrial Products market is the same USA/West. So is Russia and Brazil and e.g. its Coffee. This how and why Saudi Arabia is hesitant.
In other words, all these countries a easily sanctioned by the West. Therefore, it is an Economic Block of the poor, by the poor, for the poor and the chronically dependants like Uganda.
It is as risky as joining a Kasanna village “Niggina Circle” that can collapse anytime, should the Cashier escape with the cash purse and the Signboard.