Business
Brazil seeks to expand economic ties with African Countries
The new thrust builds on progress made under former President Luiz Inacio Lula da Silva, who visited at least 25 African countries and doubled the number of embassies in the region as he looked to establish Brazil as a leader of the developing world.
Brazil’s overall trade with Africa has quadrupled since 2002 to $20.6 billion last year, compared to its $82 billion trade with the European Union. The fast growing ties are overwhelmingly based on the exploitation of commodities as Africa taps Brazilian firms’ expertise in mining, oil exploration and tropical agriculture.
Mining giant Vale opened a $1.7 billion coal mine in Mozambique in May that Pimentel said would give a $1 billion boost to Mozambique’s trade balance next year. Brazilian construction firm Odebrecht is the largest private employer in Angola, with activities including food and ethanol production, factories and supermarkets. Petrobras, Brazil’s state-controlled oil company, is active in Angola in deep-water drilling.
Brazil sees a growing market for its services and goods related to such investments.
Brazil’s Trump Card – Being Nice
Almost half of sub-Saharan African exports now go to emerging and developing markets compared with less than a quarter in 1990, according to the International Monetary Fund (IMF). China alone accounts for about 17 percent of the region’s trade, with India and Brazil accounting for 6 percent and 3 percent respectively.
Skeptics say Africa’s low level of business diversity and its relatively small economic output limits its potential to become a major trade and investment partner for Brazil.
“It’s still a very small market, income is very concentrated and the space for advance is small,” said Bruno Lavieri, an economist at Sao Paulo consultancy Tendencias.
“Even in the long term it will take decades for Africa to be really an important player in Brazil’s trade.”
