Brazil 'to write off' almost $900m of African debt

 
Brazilian President Dilma Rousseff (L) greets Egyptian counterpart Mohammed Morsi (R) at the AU summit Brazil's President Dilma Rousseff (L) wants to boost trade with Africa

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Brazil has announced that it will cancel or restructure almost $900m (£600m) 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 African Union summit in Ethiopia.

'Strategic'

"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.

A spokesman for Brazil's Foreign Ministry told Efe 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.

Resource-hungry

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 (£3.3bn) in 2000 to $26.5bn (£17.5bn) in 2012.

Bulldozer loads lorry in the Brazilian mining giant Vale's coalmine on the outskirts of Tete province, Mozambique, 8 November 2010 Trade between Brazil and Africa has grown fivefold in the last decade, fuelled by South America's hunger for natural resources

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.

 

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  • rate this
    0

    Comment number 239.

    If African countries are suffering from unsustainable debt why dont they just unilaterally default? Whose going to stop them? What could they stand to lose, only a credit rating that they'd be mad to make use of anyway. I can only guess that aid is somehow being translated into political will to remain in debt.

  • rate this
    +1

    Comment number 218.

    I prefer to see the influence of Brazil who are at least attempting, albeit slowly, to get control of the Amazonian ecosystem, rather than the all consuming attitude of the Chinese. Yet i still fear for the African continents, wilderness demise. The face of this article is of good news however it remains to be seen if this translates into a sustainable, stronger continent. Education is one key.

  • rate this
    +1

    Comment number 93.

    To cancel the debt of African countries does not improve the lot of African people, it only increases the amount of money that elites and governments can take for themselves or spend on military equipment. It doesn't improve literacy, life expectancy or maternal survival rates; it merely increases the number of ferraris and swimming pools of politicians.

  • rate this
    +4

    Comment number 30.

    Anyone who has spent as much time in Africa as I have will know all this achieves is more funding of the monies siphoned off by those in power
    Africa should get zero funding until it gets it's own house in order
    With people starving, the people who think they know how to run things are only feathering their own nest running around in big cars and taking from the poor to fund their own lifestyles

  • rate this
    +1

    Comment number 23.

    Smart move. The fast growing economies (BRICs) will soon lose growth momentum as its populous becomes more middle class and economy moves towards service sector. But investing in Africa will encourage trade and secondary sector employment, which should help maintain a solid growth rate. When Africa emerges from poverty it has a lot to offer, and investing now will pay big dividends in the future.

 

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