By Oluwafemi Kater Ilori Esq
- Introduction
Overview of BRICS.
BRICS is an acronym that represents Brazil, Russia, India, China and South Africa. Initially founded in 2006 by Brazil, Russia, India and China, the bloc expanded in 2010 with South Africa’s inclusion.[1] The group was established as an alliance of emerging economies with the aim of exerting political and economic influence globally, countering the western led international institutions which had become increasingly less helpful to the needs of developing nations.
A key goal of BRICS is to reduce reliance on the US Dollars,[2] a globally dominant and stable currency backed by a strong economy[3], this in fact, would require legal frameworks and cooperation among member countries. Despite challenges, the combined GDP[4] of these countries is in trillions of US dollars making it a major global economic force[5].
The bloc continues to expand, allowing countries to join either as observers or partners. Saudi Arabia, Iran, Ethiopia, the United Arab Emirates, and Egypt joinied BRICS in 2024.[6] Most recently, On the 17th of January 2025 Nigeria became a full partner of the bloc. This new status will mean legal obligations that Nigeria will have to align to in order to meet the group’s objectives. This article examines the legal implications of Nigeria’s BRICS membership, highlighting its new role in BRICS, key areas of alignment, challenges, and opportunities.
- Nigeria’s New Role
Nigeria became the 9th partner country of BRICS, joining Bolivia, Cuba, Kazakhstan, Thailand, Uganda, Malaysia and Uzbekistan. This new partnership category was introduced at the 16th BRICS summit held at Kazan, Russia, in October 2024.[7]
Nigeria’s inclusion in BRICS marks a strategic shift in its global alliances, opening avenues for trade, investment, and economic cooperation. The partnership is expected to strengthen Nigeria’s economic position in global governance while providing alternative funding sources outside western-controlled financial institutions such as the International Monetary Fund (IMF) and World Bank.
As Africa’s most populous country and largest economy, Nigeria stands to benefit from infrastructure development, job creation, and increased foreign direct investment (FDI) through partnerships with BRICS nations. However, Nigeria’s role in BRICS remains undefined, as the country already maintains strong economic ties with Western countries[8] and other international organizations[9].
One of the most significant advantages for Nigeria in BRICS is access to financing from the New Development Bank (NDB), which was established by BRICS as an alternative to the World Bank and IMF.[10] Many developing nations have criticized these Western-controlled institutions for imposing strict loan conditions that limit national policy choices. Given that Nigeria has been running a budget deficit of approximately 5% since 2020[11], access to BRICS-backed financing could provide a much-needed economic boost and reduce dependence on Western financial institutions.
However, Nigeria’s deeper involvement in BRICS may come with diplomatic challenges. U.S. President Donald Trump has warned BRICS member states against creating or supporting an alternative currency to replace the U.S. dollar as the global reserve currency. In a statement, Trump declared that any country attempting to do so would face 100% tariffs.[12]
Despite these concerns, Nigeria’s partnership with BRICS offers an opportunity to diversify its economic alliances, strengthen cooperation, and enhance its influence in global economic and political affairs.
Legal Implications of Nigeria Joining BRICS
- Trade and Investment Regulations:
BRICS countries have implemented various measures to enhance investment facilitation, streamline administrative procedures, and strengthen investor protections. These initiatives set a precedent for countries looking to join and Nigeria, which may need to adjust its legal framework to align with BRICS standards and attract investment from partner nations. For instance, South Africa, in 2018, launched the InvestSA One-Stop Shop Initiative[13] to coordinate and facilitate registration and licensing procedures for investors. Additionally, the Protection of Investment Act (2019) came into force following the termination of several bilateral investment treaties, ensuring a national framework for investment protection. While these initiatives were not directly tied to BRICS, they reflect broader efforts among BRICS members to create more investor-friendly environments. Similarly, in Brazil, APEX-Brasil[14], the country’s national trade and investment promotion agency, developed a comprehensive online platform to provide exporters and investors with real-time market intelligence.
China has also implemented investment-friendly reforms by reducing bureaucratic barriers, introduced faster approval processes for healthcare and medical industries, and lowered investment application fees.[15]
India, through Invest India, launched the Business Immunity Platform[16], a dedicated investment portal providing pandemic-related tools and regulatory guidance for businesses.
Nigeria, in joining BRICS, may need to review its investment laws and ease bureaucratic hurdles to remain competitive within the bloc. The country has already taken steps in this direction with the establishment of the One-Stop Investment Centre (OSIC) under the Nigerian Investment Promotion Commission (NIPC)[17]. OSIC provides a single portal designed to streamline business registration and investment processes by integrating various government agencies responsible for business approvals, permits, and registrations. However, further reforms—such as revising Nigeria’s Investment and Securities Act (ISA) and strengthening investor protections—may be necessary to attract BRICS investments and align with global best practices.
2. Monetary Policy Adjustments:
BRICS has been exploring mechanisms to reduce reliance on the U.S. dollar in international trade.[18] Nigeria’s participation in such initiatives could lead to significant changes in its monetary policies. Nigeria’s heavy dependence on the U.S. dollar has long dictated its foreign exchange policies, with the Central Bank of Nigeria (CBN) persistently engaged in efforts to stabilize the Naira against the dollar.[19] The nation’s financial news cycle is dominated by daily fluctuations in the Naira-USD exchange rate[20], reflecting an over-reliance on the dollar for trade and international transactions. The CBN has issued numerous policies—such as the Retail Dutch Auction System (RDAS)[21], interventions in Bureau de Change (BDC) operations, and foreign exchange circulars—aimed at controlling dollar demand.
The CBN’s exclusive focus on the USD in its exchange rate publications reinforces this dependence, making transactions with other BRICS currencies—such as the Chinese yuan, Russian ruble, or Indian rupee—underdeveloped and complex for businesses.[22] However, with Nigeria’s new BRICS partnership, a shift in monetary policy may become necessary to align with the bloc’s push to reduce reliance on the dollar. Potential changes such as:
Diversifying Reserve Currencies: The CBN may need to hold and trade in a broader mix of BRICS currencies to facilitate trade and investment.
Expanding Bilateral Currency Swap Agreements: Similar to the existing yuan swap deal with China,[23] Nigeria could explore agreements with India, Russia, and Brazil to ease cross-border transactions.
Encouraging Local Transactions in BRICS Currencies: To support businesses trading with BRICS partners, Nigeria may introduce policies to encourage direct settlement in non-dollar currencies like Russia and China.[24]
Reducing Dollar Liquidity Fixation: The CBN may adjust its foreign exchange management to give equal prominence to BRICS currencies, thereby reducing its current dollar-based approach.
By gradually reducing its dependence on the U.S. dollar and integrating BRICS financial systems, Nigeria can enhance its monetary sovereignty, stabilize its foreign exchange market, and reduce the pressure of dollar liquidity on its economy.
3. Intellectual Property and Technology Transfer
BRICS has taken significant steps to enhance technology transfer and intellectual property (IP) cooperation among member states. The BRICS Science, Technology, and Innovation Entrepreneurship Partnership (STIEP) was introduced at the 4th BRICS STI Ministerial Meeting in 2016 and later formalized through the BRICS Action Plan for Innovation Cooperation (2017-2020).[25] This initiative aims to create a robust framework for technological collaboration, facilitate knowledge exchange, and improve the commercialization of research and development (R&D) across BRICS nations.
A key aspect of this effort is the BRICS Technology Transfer Framework, which promotes:
Fostering Intellectual Property Protection: Strengthening IP management and harmonizing protection policies across BRICS countries.
Expanding Technology Transfer Opportunities: Facilitating the exchange of innovations and research from academic institutions to industries across BRICS nations.
Capacity Building: Providing joint training courses for technology transfer professionals.
Creating a Common Database: Establishing a shared repository of intellectual property assets and available technologies.[26]
As a new BRICS partner, Nigeria will likely need to align its policies with these initiatives. This may require: Strengthening IP Laws; Establishing a Technology Transfer Hub; Encouraging R&D Collaboration: Partnering with BRICS nations to increase joint research projects and innovation exchange. Developing a National IP and Tech Transfer Strategy: Adopting best practices from BRICS partners to boost local industries and encourage foreign investment in innovation-driven sectors.
By integrating into the BRICS Technology Transfer Network, Nigeria could improve its technological capabilities, strengthen IP protections, and create a more attractive environment for innovation-driven investments.
4. Dispute Resolution Mechanisms
BRICS has recognized the need for a fairer and more equitable arbitration system that allows developing and least-developed countries to establish a stronger presence in international dispute resolution. Traditionally, the global arbitration framework has been dominated by institutions based in the Global North, often leaving the Global South at a disadvantage in investor-state and commercial disputes.[27]
To address this, BRICS members have initiated steps toward developing an alternative arbitration framework. One key effort was the establishment of the BRICS Dispute Resolution Centre in Shanghai.[28] Additionally, internal developments within BRICS countries—such as India and Brazil’s Bilateral Investment Treaty (BIT)[29]—reflect a shift toward dispute resolution mechanisms that are more accessible and balanced for emerging economies.
BRICS has also established the Rules of Procedure for the BRICS Expert Committee on Arbitration[30], which will influence the direction of dispute resolution within the bloc.
For Nigeria, joining BRICS may necessitate reforms in its arbitration and dispute resolution framework. Given its increasing engagement in foreign investment and trade, Nigeria could consider: Aligning with BRICS arbitration initiatives, supporting a dedicated BRICS arbitration center. Updating its arbitration laws to reflect best practices from BRICS nations, ensuring that disputes involving foreign investors are resolved fairly and efficiently.
Engaging in the BRICS Expert Committee on Arbitration, allowing Nigeria to shape global arbitration reforms alongside other developing economies.
Opportunities for Nigeria
Increased Trade & Investment – Nigeria could benefit from expanded trade relations with BRICS members, reducing reliance on Western economies and increasing foreign direct investment (FDI). Aligning trade policies with BRICS frameworks may encourage smoother transactions.
Access to Development Financing – The New Development Bank (NDB) provides funding for infrastructure and economic projects[31], offering an alternative to traditional Western financial institutions. Nigeria could leverage this for key national projects.
Technology & Innovation Growth – Nigeria can engage in BRICS Science, Technology, and Innovation (STI) partnerships, fostering tech transfer, research collaboration, and stronger intellectual property (IP) protections.
Energy & Infrastructure Development – BRICS partnerships, particularly with Russia and China, could enhance Nigeria’s oil, gas, and renewable energy sectors while funding infrastructure projects crucial for economic growth.
New Trade Agreements & Market Access – BRICS membership could lead to preferential trade agreements, reducing tariffs and enhancing Nigeria’s position within the African Continental Free Trade Agreement (AfCFTA), boosting regional trade.
Challenges and Risks
Regulatory Adjustments: Nigeria may need to reform key regulatory frameworks, particularly in areas like trade tariffs, financial policies, and dispute resolution, to accommodate BRICS economic structures.
Economic Dependence Risks: While BRICS offers opportunities, Nigeria must ensure it does not become overly reliant on the bloc, particularly in areas like trade financing and currency policies.
Geopolitical Considerations: Aligning with BRICS could shift Nigeria’s diplomatic balance, potentially affecting its relationships with Western allies and financial institutions.
Conflicts with Existing Laws: Nigeria’s legal framework may face conflicts with BRICS policies, requiring adjustments to align with the bloc’s trade, investment, and financial regulations. Areas such as competition law, intellectual property, and financial oversight could require significant amendments to prevent legal uncertainty and ensure smooth integration.
International Agreements: Nigeria’s membership in BRICS could create challenges in balancing its existing international agreements, particularly those with Western financial institutions, trade partners, and development organizations. Renegotiating trade terms, investment treaties, and diplomatic commitments may be necessary to ensure Nigeria does not face legal disputes or economic disadvantages while fostering its BRICS partnerships.
Conclusion
Nigeria’s integration into BRICS marks a pivotal moment in its economic and legal landscape, positioning the country as a key player in a shifting global order. As BRICS nations continue to challenge traditional economic structures and build one of its own, Nigeria’s legal framework must evolve to facilitate deeper cooperation in trade, investment, and dispute resolution while balancing existing international commitments. Legal reforms will be central to ensuring Nigeria maximizes the benefits of BRICS membership—harmonizing regulatory frameworks, fostering investor confidence, and addressing potential conflicts with domestic and international laws. Ultimately, BRICS offers Nigeria a platform to enhance its influence in global governance, but its success within the bloc will depend on proactive legal and policy alignment. It is hoped that Nigeria’s partnership with BRICS will complement rather than weaken its existing ties with Western countries, allowing it to strategically balance relationships across multiple global economic blocs.
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[1] https://www.bbc.com/news/world-66525474
[2] https://www.cfr.org/backgrounder/what-brics-group-and-why-it-expanding
[3]https://www.investopedia.com/terms/b/brics.asp#:~:text=BRICS%20refers%20to%20certain%20emerging,on%20economic%20expansion%2C%20including%20trade.
[4] Gross domestic product
[5] https://www.bbc.com/news/world-66525474
[6]https://www.investopedia.com/terms/b/brics.asp#:~:text=BRICS%20refers%20to%20certain%20emerging,on%20economic%20expansion%2C%20including%20trade.
[7] https://www.reuters.com/world/brazil-announces-nigerias-acceptance-brics-partner-country-2025-01-17/
[8] https://www.state.gov/u-s-relations-with-nigeria/
[9] https://www.worldbank.org/en/country/nigeria/overview?utm_source=chatgpt.com
[10] https://theconversation.com/nigerias-brics-partnership-economist-outlines-potential-benefits-248943
[11] https://tradingeconomics.com/nigeria/government-budget
[12] https://www.reuters.com/markets/currencies/trump-repeats-tariffs-threat-dissuade-brics-nations-replacing-us-dollar-2025-01-31/
[13] https://www.gov.za/Invest%20SA%3AOnestopshop
[14] chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.eeas.europa.eu/sites/default/files/mapa_de_investimentos_brasil-ue_eng_final_0.pdf
[15] chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://unctad.org/system/files/official-document/diae2023d1_en.pdf
[16] ibid
[17] https://nigerianhighcommission-sle.org/pages/trade-and-investment#:~:text=Established%20in%202006%20within%20the,all%20sectors%20of%20Nigeria’s%20economy.
[19] https://nairametrics.com/2024/11/29/analysis-as-nigerias-trade-shifts-east-do-we-still-need-the-us-dollar/#:~:text=Similarly%2C%20Nigerian%20businesses%20importing%20goods,to%20settle%20business%20input%20costs.
[20] https://www.bloomberg.com/news/articles/2024-09-13/why-nigeria-s-naira-currency-ngn-usd-slumped-and-why-it-matters
[22] https://norrenberger.com/the-dollar-effect/#:~:text=Nigeria%2C%20like%20many%20other%20nations,health%20of%20the%20Nigerian%20economy.
[23] https://www.bloomberg.com/news/articles/2024-12-27/china-and-nigeria-renew-currency-swap-to-boost-bilateral-trade
[24] https://www.globaltimes.cn/page/202403/1309666.shtml
[25] chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://brics2021.gov.in/brics/public/uploads/docpdf/getdocu-67.pdf
[26] ibid
[27] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4531888
[28] Marta Bono, ‘The BRICS Centres of Dispute Resolution: Causes, State of the Art, and Prospects’ (EURISPES – Laboratorio BRICS, Università di Palermo, 2022).
[29] https://arbitrationblog.kluwerarbitration.com/2020/03/19/india-brazil-bilateral-investment-treaty-a-new-template-for india/#:~:text=For%20this%20purpose%2C%20Article%2013,investors%20in%20an%20amicable%20manner.
[31] https://www.ndb.int/about-ndb/