In an announcement shared on social media platform X (formerly known as Twitter) this past Friday, BRICS (Brazil, Russia, India, China, and South Africa), the influential international bloc, confirmed that Nigeria intends to apply for membership in 2024. The tweet read, “Nigeria will apply to join BRICS in 2024,” signaling the country’s desire to deepen its involvement in global economic affairs.
BRICS serves as a coalition of emerging economies focused on fostering economic collaboration, enhancing political influence, and improving the economic standing of its member nations in the global arena. As an economic union, BRICS aims to provide numerous opportunities for member countries, particularly in boosting trade, expanding foreign market access for companies, and offering favorable conditions for institutional investors.
As of 2023, the combined GDP of BRICS nations represents approximately 31.5% of the global total, slightly surpassing the 30.7% share held by the G7 countries. This economic power has made BRICS a prominent player in global trade, and its influence continues to grow.
In a previous statement, Nigeria’s Vice President Kashim Shettima attended the 15th BRICS Summit in South Africa, where he clarified that while Nigeria had not yet applied for membership, the country was actively exploring its potential to join. Membership would allow Nigeria to enhance its economic profile, particularly in relation to oil exports.
One significant potential benefit of Nigeria joining BRICS would be the opportunity to sell its oil in Naira, the nation’s local currency, rather than relying on the U.S. dollar for transactions. This shift could help support the Naira’s value and alleviate some of the financial strain the country has been experiencing due to its fluctuating currency and ongoing economic challenges.
Prominent human rights activist and lawyer Femi Falana has previously suggested that Nigeria should explore the possibility of trading its oil and gas resources using the Naira, rather than dollars. Falana proposed that Nigeria’s foreign trade should be conducted in its own currency, encouraging buyers to acquire Naira in exchange for Nigerian crude and gas. He argued that this strategy would not only bolster the Naira but also help protect the country’s economy from external currency fluctuations.
In his own words, Falana stated, “If I had my way, my radical policy would be to 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.”
The BRICS bloc itself has been looking for ways to reduce reliance on the U.S. dollar in trade among its member countries. For example, India has begun purchasing Russian oil through a currency swap, paying in rupees and rubles rather than dollars. This strategy is seen as part of a broader move by BRICS to challenge the global dominance of the U.S. dollar in international trade.
Falana’s suggestion of using the Naira for oil trade has garnered significant attention as a potential solution to Nigeria’s ongoing struggles with the devaluation of its currency. While some experts, including Falana, view this as a way to support the Naira, others have expressed reservations. Economic analysts argue that Nigeria’s current shortage of dollars—an issue exacerbated by the nation’s low foreign reserves—may make it difficult to transition away from the dollar in trade. There are also concerns that adopting the Naira in oil transactions could encourage imports, further draining the country’s currency reserves and exacerbating inflationary pressures.
For example, China, despite its strong manufacturing sector, still heavily relies on the U.S. dollar for its global trade transactions, reflecting the complexities of the global financial system. While Nigeria’s potential move toward using the Naira in trade agreements could have some advantages, it might not be enough to resolve the country’s broader economic challenges without a more comprehensive overhaul of monetary policies and trade strategies.
The debate surrounding Nigeria’s potential BRICS membership and currency policy highlights the tension between national economic autonomy and the realities of the global financial system. Nigeria’s participation in BRICS could provide a valuable platform for enhancing its global economic influence, but the full benefits will likely depend on careful economic management and strategic alignment with international trade practices.
