South Africa Pushes BRICS to Fund African Manufacturing, Not Commodity Extraction

CAPITAL FLOWS AND MANUFACTURING CAPACITY RESHAPE BRICS INVESTMENT STRATEGY

A delegation of around 130 South African business leaders arrived in New Delhi on Friday carrying a pointed message: investment into Africa must build productive capacity, not just extract raw materials. President Cyril Ramaphosa delivered that message directly at the BRICS Business Forum Leaders’ Dialogue, warning member countries and investors that trade volume alone cannot substitute for manufacturing development in developing economies.

The core concern Ramaphosa articulated is a capital allocation problem. BRICS members, particularly African nations, have historically participated in global value chains as commodity suppliers while manufacturing, beneficiation and technology development remain concentrated in wealthier economies. He called for a deliberate reorientation of investment flows toward manufacturing, mineral beneficiation, industrial technology, energy systems, infrastructure and logistics. The message to companies was unambiguous: establish production facilities and develop local capabilities rather than investing solely to gain market access.

“We cannot accept a future where Africa supplies the minerals while value addition and manufacturing take place elsewhere,” Ramaphosa told political and business leaders ahead of the 18th BRICS Summit, scheduled for Saturday and Sunday in New Delhi.

The economic logic centers on where value creation occurs. Raw commodity exports generate far less return than processed or manufactured goods, and changing that distribution requires changing where capital is directed. Ramaphosa called for governments and businesses to work in tandem, with governments establishing conditions for trade and investment while companies identify production and commercial opportunities. The BRICS Business Council, established during South Africa’s BRICS chairship in 2013 to increase private-sector participation, should evolve beyond consultation to facilitate actual commercial relationships, he argued.

The delegation traveling with Ramaphosa included representatives from the South African chapters of the BRICS Business Council and the BRICS Women’s Business Alliance, signaling an effort to deepen private-sector engagement in the bloc’s economic programme.

The timing reflects what Ramaphosa described as an inflection point in global economics. Trade patterns are shifting, technological advances are accelerating and climate pressures are mounting. These forces are compelling governments and companies to reconsider where they source goods, produce them and invest capital. For BRICS, this disruption presents an opportunity to build a more diversified economic structure for the Global South.

By contrast, the bilateral agenda between South Africa and India will test these principles in concrete commercial terms. The India-South Africa Business Leadership Roundtable, scheduled for Saturday, focuses on sectors where South Africa is targeting greater Indian investment: pharmaceuticals, infrastructure, critical minerals and the electric-vehicle battery value chain. The two countries are also negotiating a preferential trade agreement, having signed terms of reference in August. The proposed arrangement would lower tariffs on selected goods rather than establish comprehensive free-trade terms. India is seeking better access for vehicles, pharmaceuticals and industrial machinery, while the South African customs union wants to increase its exports to India.

For South Africa, the critical question is whether closer trade and investment ties will support domestic processing and manufacturing or reinforce its role as a supplier of unprocessed minerals. This dynamic mirrors the broader BRICS challenge Ramaphosa outlined at the forum. More detail on these strategic considerations is available at https://mg.co.za/business/2026-09-11-ramaphosa-warns-brics-against-a-new-raw-material-trap-for-africa/

Ramaphosa also held a bilateral meeting with Russian President Vladimir Putin, aimed at renewing high-level engagement and discussing issues of mutual concern. The summit agenda will cover trade and investment, reform of global institutions and the role of the expanded bloc in advancing the interests of the Global South.

Whether the summit produces capital allocation commitments that genuinely shift where value is created within the bloc, or settles for another round of economic declarations, is the question investors and operators will be watching most closely.