May 28, 2013 (TSR) – Brazil will cancel or restructure almost $900 million in debt owed by African countries, a Brazilian official said on Saturday, as part of a plan to increase future funding to the continent.
Latin America’s economic powerhouse is increasingly expanding 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, economists say.
Brazilian officials said 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.
“Almost all (aid) is cancellation,” Thomas Traumann, spokesman of Brazil’s presidency, told reporters in Addis Ababa.
Under Brazilian law, Brasilia cannot offer new loans and long-term financial assistance to countries with outstanding debts.
Traumann said most of Brazil’s future assistance would target infrastructure, agricultural and social programmes.
Among the 12 countries set to benefit are new gas exploration hotspot Tanzania, which owes Brazil $237 million, along with oil-producing Republic of Congo and copper-rich Zambia.
Most of the debt was accumulated in the 1970s and had been renegotiated previously, Traumann added.
“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.”
In a sign of Brazil’s quest for deeper ties with Africa, Rousseff was making her third visit to the continent in as many months, Traumann added.
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 $500 billion by 2015, according to Standard Bank.