The Brazilian government is forgiving or restructuring Africa’s almost $900 million debt in an effort to strengthen economic ties between Brazil and the African continent. Twelve countries will benefit from the decision, including Tanzania, Zambia and Congo-Brazzaville.
Trade between Africa and Brazil has increased in recent years, leading to an extensive partnership between governments. Brazil’s President Dilma Rousseff announced the decision during her third visit in three months to Africa.
“To maintain a special relationship with Africa is strategic for Brazil’s foreign policy,” Rousseff explained in a press statement.
It is also strategic to renegotiate debts since most were accrued in the 1970s and Brazil’s economy is continuing to expand. Africa’s economy is also mounting rapidly.
“Brazil has great expertise in what we call tropicalizing European crops,” Rousseff’s spokesman said. “We have that technology. The idea is how to transfer it from Brazil to African countries.”
Debts not forgiven will be negotiated to include lower interest rates and longer reimbursement windows.
Congo-Brazzaville, Tanzania and Zambia owe Brazil the most. More than $700 million of the continent’s collective balance to Brazil is split between these three countries. However, other countries including the Ivory Coast, Senegal and Sudan will also benefit from this agreement.
Rousseff has also signed several major agreements with African leaders to promote economic growth and cooperation. These partnerships stem from a sudden interest in Africa’s potential as an economic powerhouse.
Several countries – including China, India and Russia – are Africa’s biggest group of investors and newest trading partners. The Africa trade between all of these nations is expected to eclipse $500 billion by 2015.