9 posts tagged brazil
9 posts tagged brazil
[Brasilia pardons debts for 12 African countries after creating agency to support development in continent.]
Brazil has said it plans to cancel or restructure $900m worth of debt in 12 African countries, as part of a broader strategy to boost ties with the continent.
Brazilian officials said on Saturday that President Dilma Rousseff, visiting Ethiopian capital Addis Ababa to mark the African Union’s 50th anniversary, was set to announce a new development agency alongside the cancellation that will offer assistance to African countries.
“The idea of having Africa as a special relationship for Brazil is strategic for Brazil’s foreign policy,” Thomas Traumann, presidential spokesman, told reporters in Addis Ababa.
“Almost all (aid) is cancellation,” Traumann said.
Among the 12 countries whose debts were pardoned, Congo-Brazzaville was the highest with a $352m debt cancelled, with Tanzania’s $237m debt the second largest.
Traumann said the move was part of Brazil’s efforts to boost economic ties with Africa, home to some of the world’s fastest growing economies.
He added that Brazil recently established an agency to support investments in industry and development in Africa and Latin America.
Vice President Paa Kwesi Bekoe Amissah-Arthur on Thursday appealed to the Brazilian investor community to consider Ghana’s strategic position within the West Africa sub-region and work together to develop her economic potentials.
He said there were huge potentials for Ghana’s economic growth and government was ready to team up with investors and provide opportunities for the generation of power. At a meeting with a Brazilian business delegation, led by Ms Irene Vida Gala, the Brazilian Ambassador to Ghana, the Vice President said the Government of Ghana was ready to collaborate with investors to tap into Ghana’s rich investment potentials within the overall national development agenda.
Vice President Amissah-Arthur noted that there were similarities between Ghana and Brazil and added that Ghana “was happy to meet with people of the Southern hemisphere.”
The race to clinch African investment is not for China alone as more Brazilian companies are moving into Africa to cement economic ties with the continent’s emerging markets.
The Brazilian government of Dilma Rousseff is taking firm steps towards stronger relations with Africa, such as the creation of a special fund to finance development projects together with multilateral lenders like the World Bank.
South America’s giant is keen on establishing a strategic association with Africa, and the tool for doing that is its powerful national development bank, the National Bank for Economic and Social Development (BNDES), which will work in conjunction with the multilateral African Development Bank (AfDB).
“There is a 40-billion-dollar shortfall in financing for a spate of 50 projects, which means the African Development Bank will have to scale up its capital and its activities,” said BNDES president Luciano Coutinho.
He added that not only public bodies need to be involved in this cooperation, but also private banks in the capital markets. The alliance was announced at an Apr. 3 seminar on “Investing in Africa: Opportunities, Challenges and Instruments for Economic Cooperation”, organised by the BNDES in Rio de Janeiro, which drew delegates from development institutions, business leaders, and personalities like former Brazilian president Luiz Inácio Lula da Silva (2003-2011).
André Esteves, the president of the private Brazilian bank BTG Pactual, also announced the launch of a one-billion-dollar risk capital fund for investment in Africa.
“This will be the biggest private sector contribution for investment in that continent, and a show of the (Brazilian) business community’s affinity with the government strategy,” he said.
During the second half of 2011, relations between Africa and Brazil continued to flourish as part of the historic trade, cultural and economic rapprochement of the two economic juggernauts.
Specifically, African governments asked for more financing from the South American country to implement development projects, according to Brazil’s National Bank of Economic and Social Development (BNDES). Key reasons for intensifying this relationship include the fact that Brazil is now the world’s sixth-largest economy (after China, the United States, France, Germany and Japan) and that it has become a major player in South-South cooperation.
Readjustments in trade flows provoked by the economic crisis in countries of the northern hemisphere also contribute to this situation. Linked in the past by colonial trade, the modern experiences of Brazil in Africa – in agriculture, social protection, vocational training and alternative sources of renewable energy – have helped strengthen the development of the region with the highest poverty rates in the world, and at the same time have created a favorable climate for private business and investment.
Sub-Saharan Africa and Brazil are natural partners for trade, investment and knowledge exchange, according to a new report from the World Bank and the Brazilian Institute for Applied Economic Research.
(Download full report)
Brazil is launching a top-level drive to expand its economic ties with Africa, a sign of how crises in the rich world are pushing faster-growing emerging economies to trade and invest among themselves.