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Brazil cancels 900 million dollars of African countries debt

Monday, May 27th 2013 - 02:41 UTC
Full article 4 comments
President Rousseff made the announcement at the African Union fiftieth anniversary President Rousseff made the announcement at the African Union fiftieth anniversary

Brazil has announced that it will cancel or restructure almost 900m dollars worth of debt with Africa. Oil- and gas-rich Congo-Brazzaville, Tanzania and Zambia are among the 12 African countries to benefit. The move is seen as an effort to boost economic ties between the world's seventh largest economy and the African continent.

Official data in Brazil show that its trade with Africa has increased fivefold in the past decade. The debt announcement was made during the third visit in three months to Africa by Brazil's President Dilma Rousseff, who attended the summit in Ethiopia to celebrate the fiftieth anniversary of the African Union.

”Almost all (aid) is cancellation,“ Ms Rousseff's spokesman, Thomas Traumann, told reporters. ”To maintain a special relationship with Africa is strategic for Brazil's foreign policy.”

He added that most of the debt was accumulated in the 1970s and had been renegotiated before. Brazil has concentrated aid in agriculture, social programs and financial support for Brazilian corporations involved in Africa.

A spokesman for Brazil's Foreign Ministry told the Spanish government news agency that the debt restructuring for some countries would consist of more favourable interest rates and longer repayment terms.

Congo-Brazzaville owes the most to Brazil - 352m - followed by Tanzania (237m) and Zambia (113.4m). The other countries to benefit are Ivory Coast, Gabon, Guinea, Guinea Bissau, Mauritania, Democratic Republic of Congo, Sao Tome and Principe, Senegal, and Sudan.

Brazil has been increasingly expanding its economic ties with resource-rich Africa as part of the so-called South-South cooperation. Trade between the two blocks went from 5bn dollars in 2000 to 26.5bn in 2012. The country has particularly close relations with the former Portuguese colonies because of the common background and language.

Brazilian companies invest heavily in oil and mining in Africa, and have taken on big infrastructure projects. Latin America's economic powerhouse has also opened 19 new embassies in Africa in the last decade, and is forecast to grow 3.5 percent this year.

But Brazil's hunt for natural resources has not always been easy in Africa.

Last month, hundreds of protesters in Mozambique blocked the entrance to a Brazilian coal mine in a row over a compensation deal agreed after they were displaced.

Human Rights Watch, a rights group, said farming communities had been resettled on arid lands and had suffered food shortages. The Brazilian giant Vale, which owns the mine and the government of Mozambique, said improvements were being made.

The African Union with 54 members is the successor of the Organization for African Unity first created in 1963 during the de-colonization process in the continent. Brazil is one of the five emerging economies that make up BRICS and with a GDP of 2.45 trillion dollars last year, the seventh most important in the world.
 

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  • Chicureo

    Debts they would have never recovered. Future business that will never materialize.

    Bribes to allow Vale to operate it hoist harassment.

    May 27th, 2013 - 04:05 am 0
  • Fido Dido

    Those debts would never be paid off anyway, so cancel them (duh, they were created out of nothing anyway) and close better deals that favors Brazilian corporations and trade routes (long term) in the fastest growing economies in continent Africa. From there you go slowly furter “east”...continent Asia. The Race for Africa is only accelerating.

    May 27th, 2013 - 06:32 am 0
  • Captain Poppy

    “Last month, hundreds of protesters in Mozambique blocked the entrance to a Brazilian coal mine in a row over a compensation deal agreed after they were displaced.
    Human Rights Watch, a rights group, said farming communities had been resettled on arid lands and had suffered food shortages. The Brazilian giant Vale, which owns the mine and the government of Mozambique, said improvements were being made.”

    Seems like the race is on for who will be the great exploiters to economically colonize Africa......China or Brazil. It was nice of Brazil to resettle farm communities........on baren land!.......Nice touch brazil.

    May 27th, 2013 - 06:36 pm 0
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