According to a recent African Development Bank report,
combined public and private financial flows to Africa rose 400% since 2000 and
are projected to exceed $200 billion in 2014. Although countries such as
France, the UK and US are still the top foreign investors in Africa, China,
Brazil, South Africa and others are closing the gap. China alone has invested
some $27.7 billion -- almost half of what the BRICS are spending combined.
Brazil's foreign policy elite like to talk up their
political solidarity and cultural affinity with Africa. Observers note that
Brazilians are more involved there than at any time since the 1960s. In the
past decade, Africa became one of Brazil´s fastest growing trade partners.
Brazilian trade to the continent expanded from $4.3 billion in 2000 to $28.5
billion in 2013. But what is really driving Brazilian engagement in the region?
Hardly surprising, there are some hard geopolitical and
commercial calculations motivating Brazil´s rapprochement with Africa. While
publicly advocating a selfless developmental -- or south-south -- project,
Brazilian companies have business interests in most of Africa's faster growing
economies. And tighter relations with African counterparts also allows Brazil
to secure its maritime control and influence over the South Atlantic.
Brazilian engagement in Africa was propelled by President
Lula (2003-2010), who traveled on 12 separate occasions to 29 states. No fewer
than 19 of the 37 Brazilian embassies operating in Africa opened their doors
during the past decade. Likewise, 18 of the 34 African embassies in Brasilia
were inaugurated during the same period.
Brazil backed these diplomatic gestures with development
muscle. The national development bank, the BNDES, has disbursed roughly $ 2.9
billion to underwrite projects in Africa since
2007. The Brazilian Cooperation Agency (ABC) and the
Brazilian Agricultural Research Corporation (EMBRAPA) are also invested in
African countries. ABC grew under Lula and EMBRAPA opened a new office in Ghana
in 2006. The creation of a BNDES office in South Africa in late 2013 underlines
the importance Brazil attaches to its partnerships there. Brazil's tropical
agriculture know-how and bio-ethanol expertise have found willing partners in
parts of Africa. EMBRAPA fielded major initiatives in the so-called
"cotton 4+Togo" which includes Benin, Burkina Faso, Chad Mali and
Togo. Meanwhile, Brazilian companies entered into significant bio-fuel deals in
Mozambique, Angola and Nigeria with the idea of also investing in local
technical expertise, infrastructure and technology.
At the diplomatic level, Rousseff's decision in 2013 to
cancel (or restructure) $900 million worth of debt with 12 African countries
did not get the reception she had hoped. Timed to coincide with the 50th
anniversary of the African Union and intended to burnish Brazilian credentials
and expand trade opportunities (since Brazilian law does not allow new loans or
financial assistance with indebted countries), the move was roundly criticized
by the left and right for favoring authoritarian and corrupt African economies.
The President has since distanced herself from the deal. Brazilian corporations
have come under fire for circumventing local laws and other forms of
malfeasance. The multinational mining company Vale, already heavily invested in
Africa, suffered financial and public relations setbacks over a suspect deal to
acquire rights to the Simandou mining concession in Guinea. Other large oil,
mining and infrastructure firms are also coming under extra scrutiny.
Brazil's engagement with Africa has historically been driven
by oil and gas, mining and infrastructure interests. Companies such as Andrade
Gutierrez, Odebrecht, Petrobras and Vale have a sustained presence on the
continent. And while these and other firms will loom certainly large in future
Brazilian calculations, forward-looking policy makers and investors would do well
to explore fast-growing sectors in which Brazil exhibits a comparative
advantage. This is not just about enlightened politics toward Africa, but also
about sustaining growth and development at home.
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