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Brazil to write off $900m of African debt

Brasilia pardons debts for 12 African countries after creating agency to support development in continent.

Last Modified: 26 May 2013 08:24
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BRICS-Africa trade is seen eclipsing $500bn by 2015 [File photo:Reuters]

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.

Signing agreements

Rousseff has met with several African leaders, including Ethiopian Prime Minister Hailemariam Desalegn, with whom she signed a series of cooperation agreements on agriculture, education, air transport and science.

Brazil's interest in Africa is part of a larger trend boosting so-called South-South cooperation, which has attracted investment from emergent economies in developing countries, namely in Africa.

Brazil, one of five members of the BRICS emerging nations group and with a GDP of $2.425tn in 2012, is the world's seventh largest economy.

The BRICs countries - comprising Brazil, China, India and Russia - are now Africa's largest trading partners and its biggest new group of investors. BRICS-Africa trade is seen eclipsing $500bn by 2015, according to Standard Bank.

Traumann said most of Brazil's future assistance would target infrastructure, agricultural and social programmes.

"Brazil has great expertise in what we call tropicalising European crops. We have that technology," he said. "The idea is how to transfer that technology from Brazil to other African countries."

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Source:
Agencies
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