IEA backs Ghana’s move to pursue BRICS partnership

The Institute of Economic Affairs (IEA) has welcomed Ghana’s decision to seek partner-country status within BRICS, describing the move as an opportunity to broaden the country’s economic relationships and strengthen its development prospects.

The policy think tank has, however, urged government to establish the appropriate institutional structures and policy measures to ensure that the country derives meaningful benefits from the proposed partnership.

In a statement released on Monday, November 9, the IEA said the decision, which has received Cabinet approval, was consistent with Ghana’s foreign policy of positive neutrality and non-alignment.

It said closer engagement with BRICS economies could help Ghana access new markets, attract investment, diversify its international partnerships and support its industrialisation drive.

The Institute stressed that pursuing the partnership should not be seen as Ghana abandoning its longstanding relationships with traditional development and economic partners, including the United States, European Union, United Kingdom, International Monetary Fund and World Bank.

Instead, it argued that maintaining those relationships while developing new alliances would provide the country with more options to pursue its economic and diplomatic interests.

“With a global population share of over 3.5 billion people, and the control of about 30% of global economic output, BRICS can expand Ghana’s trade and market access,” the statement added.

The IEA also encouraged government to explore mechanisms that would allow Ghana and BRICS member economies to settle trade transactions in their respective local currencies.

It said such arrangements could reduce the cost of foreign exchange conversions and limit businesses’ exposure to exchange-rate fluctuations.

However, the Institute cautioned that membership alone would not guarantee economic gains. It said government must implement targeted policies, strengthen the competitiveness of Ghanaian exports and create effective support systems to enable local businesses to benefit from the expanded market opportunities.

The think tank further maintained that Ghana's decision to pursue BRICS partner-country status falls within its sovereign authority to determine its foreign policy priorities, without undue influence from competing geopolitical interests.