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 39.

    >We should cancel all international debt, burn the bonds, let the Bankers >go whistle.

    I'm guessing you don't have any investments such as a private pension? you could kiss that goodbye if you do.

  • rate this
    0

    Comment number 38.

    So Brazil is doing what others did decades ago.

    £900m is peanuts these days. Less than our bankers pay themselves in bonuses EVERY year.

    Now that is worth a comment or two.

  • rate this
    +1

    Comment number 37.

    Pity no one is encouraging cancelling debts for maintaining nature and ecosystem services, as had been tried a few times before. Instead, it is for getting priority access to concessions, and causing more environmental problems. When will we ever learn?

  • rate this
    +17

    Comment number 36.

    "most of the debt was accumulated in the 1970s and had been renegotiated before."

    Over 40 years of debt I would imagine has been paid several times over in interest alone so the Brazilians are making a wise move to enamour themselves with Africa.
    Africa has enormous wealth which could make life for everyone there a lot easier were it not for the corrupt dictators running some areas.

  • Comment number 35.

    All this user's posts have been removed.Why?

  • rate this
    +27

    Comment number 34.

    28. vincent
    " often PR exercises or blatently trade related"
    Perhaps you should find out what is actually counted as "aid" and how much is dependent on buying goods from the UK or in fact whoever provides the aid. Just as when a company may give away computers loaded with it's own software when they want to upgrade who do they go to? Often aid is used to dump supluseses. etc.,do some research

  • rate this
    -37

    Comment number 33.

    27 kinglouis.

    Any chance that our debts will be cancelled ? you know the debt that the Socialists have loaded on us our children and most likely their children to come ? No did not think so. Socialists are the new slave traders. They have sold the people of this country into generations of tax bondage. And still the slack-jawed would have more. We are slaves to the system Thanks Tony Gordon.

  • rate this
    +5

    Comment number 32.

    What Africa needs is the development of commodity markets in Africa alongside the development of capital markets in Africa.

  • rate this
    +3

    Comment number 31.

    28.vincent - "......i would imagine 13 billion winds up in swiss bank accounts........"


    And why would you imagine that? Because of your inbuilt bias per chance, rather than any actually facts beyond a vague "aid sometimes gets wasted" belief......??????

  • 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
    -2

    Comment number 29.

    all debt should be cancelled everywhere

  • rate this
    -14

    Comment number 28.

    philjer " much aid from countries like the UK is often PR exercises or blatently trade related"

    I fail to see how 15 billion pounds a year in uk overseas aid is a PR exercise, i see it as missuse of taxpayer money, i would imagine 13 billion winds up in swiss bank accounts, the left view of africa is keep giving them trillions, these people need good leaders not money.

  • rate this
    -2

    Comment number 27.

    Amazing and good on Brazil, lets hope the greedy bureaucrats of UK and London do the same.

  • rate this
    +17

    Comment number 26.

    This is great news for Africa as one of the main reasons for the poverty is due to huge debt repayment to the IMF and World Bank

  • rate this
    +3

    Comment number 25.

    11. Shylock
    "The Brits, Germans, French and Italians were the first to take from Africas' riches; left a mess behind and no democracy.".

    Nice to know History started in the 1800s.

    Take it you haven't heard of the Romans, Carthaginians, Egyptians, Arabs, & others, know practically nothing about the Internal Politics of Africa, and dismiss a whole Continent as a mess without Democracy.

  • Comment number 24.

    All this user's posts have been removed.Why?

  • 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.

  • rate this
    +10

    Comment number 22.

    The rest of the Western world needs to follow Brazil's lead although it's sadly obvious they won't.

    The developed world has become like an evil empire dedicated to imposing debt slavery on the most vulnerale and weak countries. The tables are slowly turning though and one day we made be made to reap what our disfunctional, criminal, capitalist system has sowed for us.

  • rate this
    +4

    Comment number 21.

    It's hardly an altruistic move, Brazil is positioning for influence and 'cancelling' small debts will give it access to resources to boost its expansion. Any money made is highly likely to enrich the corrupt few in charge of African nations whilst the majority starve with their hands held out to the western taxpayer.

  • rate this
    +5

    Comment number 20.

    "Oil- and gas-rich Congo-Brazzaville, Tanzania and Zambia are among the 12 African countries to benefit"

    Anyone who thinks this is being done for humanitarian reasons is very very naive. Brazil wants something out of this, be it trade, security of oil and gas or just long term money. The trouble is corrupt governments in Africa will just waste any benefit and not pass it on.

 

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