Brazil to Cancel US$900M in African Debt

By Lucy Jordan, Senior Contributing Reporter

BRASÍLIA, BRAZIL – In the latest in a raft of measures to strengthen economic and diplomatic ties between Brazil and Africa, Brazil will write off or restructure US$900 million (R$1.8 billion) in African debt. President Dilma Rousseff announced the measure during an official visit to Ethiopia over the weekend to attend celebrations marking fifty years of the African Union.

Amongst the twelve countries that will benefit are oil-rich Republic of Congo, the Ivory Coast and Tanzania. “The idea of having Africa as a special relationship for Brazil is strategic for Brazil’s foreign policy,” Thomas Traumann, the presidential spokesman, told reporters in Addis Ababa.

The move is the latest measure in a long-term shift toward Africa that has included, over the past decade, a doubling of Brazil’s diplomatic presence in Africa from 17 to 37 embassies and a steep increase in trade between the regions from US$4.2 billion to US$27.6 billion. The increased engagement has coincided with Brazilian companies, including Vale and Petrobras, acquiring interests in the continent.

Writing off the debt “signifies another important step in what can be considered part of decades-long efforts to strengthen Brazil’s diplomatic, economic, and political ties to African countries,” Colin Snider, Assistant Professor of History at the University of Texas-Tyler told The Rio Times. “Such a move could help it in trying to strengthen its own global economic relations, including the extraction or exchange of resources.”

Yet, as Latin America consultant James Bosworth told The Rio Times, Brazil’s decades-long shift towards Africa adheres not only to economic interests, but also reflects the country’s growing geopolitical ambitions, such as a permanent seat on the UN security council.

“In terms of international relations, Brazil views itself as a champion of developing countries. These aid initiatives pay off in diplomatic gains later,” he said, citing the recent appointment of Roberto Azevêdo, a Brazilian, to head the World Trade Organization. African votes were crucial in electing Azevêdo, who was not the preferred choice of Western powers such as the U.S. and UK.

The debt cancellation comes alongside plans for Brazil-funded development projects including a US$1 billion railway in Ethiopia and a drinking water dam in Mozambique.

In what was likely a veiled nod to Africa’s historical relationship with Western powers, Dilma was careful to emphasize that Brazil sought a cooperation with Africa based on mutual benefit and shared values, rather than economic exploitation. “Brazil sees Africa as a brother and close neighbor,” she said at a press conference.

The activity of the BRICS nations in Africa have come under scrutiny as those countries have aggressively competed for access to the continent’s mineral and commodity wealth, often leading to poor workers’ conditions and environmental degradation.

Brazil has not been immune to these accusations: In April, protesters occupied the site of a Mozambique mine operated by Brazilian minerals giant Vale, claiming a resettlement deal was inadequate. “Brazil is very sensitive to the criticism that they’re acting in colonial way in Africa,” Bosworth said. “This debt relief is an attempt to counter some of that criticism before it grows further.”

Brazil is keen to share knowledge in areas such as tropical agriculture, Alexandre de Freitas Barbosa, an economic history professor at the University of São Paulo and a member of research group NAP Brasil-Africa, told The Rio Times, which could help alleviate African hunger while creating a market for agricultural products from Brazil.

“Both sides could be better off than before,” he said. However, “It is also true that behind this friendly diplomacy there are huge interests of companies like Vale and Petrobras and the companies from the construction sector. […] We should look at these private interventions with some caution.”