Egypt is joining Brics next year: Egypt was among the six countries invited to join the bloc of emerging economies known as the Brics during the organization’s annual summit in South Africa last week. Capping three days of talks, the leaders of Brazil, Russia, India, China and South Africa a nnounc ed an agreement on a framework for expanding the bloc and said six new members would join in 2024.

Who’s in? Egypt will join Saudi Arabia, the UAE, Iran, Ethiopia, and Argentina as new members of the group. This will increase the bloc’s share of global GDP to almost 30% from 26% currently, while the inclusion of Saudi Arabia, Iran and the UAE will mean that Brics members control 43% of global oil production, up from 20% currently.

The expansion also introduces a measure of geopolitical tension into the group: Relations are still chilly between Egypt and Iran as well as Egypt and Ethiopia. Saudi and Iran are only now making up. And Argentina and Egypt are two of the IMF’s most active borrowers.

We already had a foot in the door: Egypt joined the Brics’ USD 100 bn multilateral lender, theNew Development Bank (NDB), in April, allowing Egypt to access finance from the bank for development projects.

Could Brics be (in the longer term) part of a solution to our economic woes? Joining Brics will boost FDI and exports, deepening economic cooperation and trade exchange between Egypt and other member states, Finance Minister Mohamed Maait said in a statement at the weekend. Membership could also help the country reduce its dependence on the USD for international trade, which would “help Egypt rationalize its hard currency spending on imports, relieving pressure on the budget,” Maait said, pointing to the hefty cost of USD-denominated wheat and fuel imports.

REMEMBER- The government is already in talks with three Brics countries — India, Russia, and China — to trade in local currencies, though no agreements have yet been finalized.

A thumbs up from market-watchers: “It's positive for Egypt to be included. Whilst in the near term the impact is expected to be limited, it could help strengthen its relationships with key EM economies,” ADCB’s Monica Malik told Reuters. FIM Partners’ Charles Robertson agreed, telling the newswire that “Egypt has two deep needs — FDI and a cheaper debt burden — and Brics membership can help with both.”

Brics x Africa: Prime Minister Moustafa Madbouly pointed towards the need to strengthen cooperation between Brics and Africa, he said during his participation in the summit. He said he hoped to see the bloc support the sustainable debt alliance Egypt is setting up to regulate sustainable debt transactions and lift debt burdens for emerging markets. Madbouly also called for the bloc to pursue non-USD trade with developing countries and those on the African continent.

POLITICIANS SPEAK-

Brics isn’t done expanding: The five countries suggested that more countries could be invited to join the bloc at a later date. Brazil's President Luiz Inacio Lula da Silva said his government would support Nigeria, Angola, Mozambique and the Democratic Republic of Congo joining the organization, adding that countries would be chosen based on their geopolitical importance rather than the ideology of their governments.

Xi pledges deeper Africa ties: In a meeting with African leaders at the summit, Chinese President Xi Jinping said that Beijing will launch new initiatives to promote industrialization and food self-sufficiency in Africa, according to Reuters. A top Chinese foreign ministry official said last week that African leaders want China to pivot from infrastructure financing towards developing countries’ manufacturing sectors.

El Sisi reax: “We appreciate the confidence of all Brics member states with whom we share robust relations. We look forward to cooperating and coordinating with them, and with the other countries invited to join the bloc, to achieve its goals toward strengthening economic cooperation among us and raise the voice of the Global South,” President Abdel Fattah El Sisi said following the announcement.