Reserve Bank governor Lesetja Kganyago. Picture: SUPPLIED
Reserve Bank governor Lesetja Kganyago. Picture: SUPPLIED

The looming global trade war dominated a pre-Brics summit briefing on Tuesday, with Finance Minister Nhlanhla Nene calling it the bloc’s biggest concern, while Reserve Bank governor Lesetja Kganyago pulled no punches, calling protectionism "stupid".

The Brics partners — Brazil, Russia, India, China and SA — were "navigating a lot of economic turbulence together", Nene said in Sandton.

The biggest concern for Brics countries was that the trade tension could escalate into a trade war, Nene said. "There is a consensus that current trade tensions pose one of the biggest challenges to strong and sustainable growth."

He said quite a few countries, including SA, were opposed to a protectionist approach.

"The spillover effects could filter through to the investment plans of our trading partners," he said, with small, open economies such as SA particularly vulnerable.

Kganyago said: "There is stupidity in protectionism. It is stupid. You can’t produce everything in your countries. That is the heart of the global trade system."

He said the Brics summit — which starts in Sandton on Wednesday — was taking place at a challenging point, when trade tensions are casting uncertainty over global economy.

Nene said SA would focus on infrastructure finance to spur growth, "but we need to leverage private sector participation".