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Brazil to build closer links to African energy

04th May 2012

Brazil looks to build even closer trade relations with Africa as its economy grows exponentially

Bilateral trade between African countries and Brazil jumped to USD 27.6bn in 2011 from USD 4.3bn in 2002

Economic and political ties with African countries have become "strategic" for Brazil, Fernando Pimentel, the country's development, trade and industry minister said.

Former President Luiz Inacio Lula da Silva recognised the importance of forging closer links with Africa, and current President Dilma Rousseff has visited Africa to cement ties, Pimentel said during a seminar on investment opportunities in Africa in Rio de Janeiro, Dow Jones reported.

In Africa, Mozambique currently attracts the most Brazilian investment, with mining company Vale SA planning to spend about USD 8.2 billion in coal mining and rail facilities, while Ghana is another important investment destination for Brazilian capital, Pimentel said.

Brazil's Foreign Trade Board Camex recently granted USD 2bn in capital for Angola, he said. The funds form part of a credit line set up in 2011 by Brazil to promote African agriculture via farmers' purchases of Brazilian agricultural equipment, and may also be used to support oil-field development in Africa.

"The impulse Lula gave his government to reach out to Africa continues," Pimentel said at the event, organized by Brazil's state-controlled development bank BNDES.

BNDES President Luciano Coutinho said the bank will "accelerate" financing availability for Brazilian projects in Africa. The African economies are seen growing an average of 5 per cent to 5.5 per cent a year over the next few years, offering opportunities, according to Coutinho.

Bilateral trade between African countries and Brazil jumped to USD 27.6bn in 2011 from USD 4.3bn in 2002, and Brazil is now in a position to increase its investments in African nations because Brazil is growing and is richer because it has redistributed its wealth.

However, Brazil is also indebted to Africa, which provided Brazil's colonialists with slaves in the past, Lula continued.

"It's time for Brazil to pay off its enormous debt with Africa, African blood was spilled in the plantations and the 'quilombos'" Lula said, referring to runaway slave communities. "Brazil is the country with the biggest number of Afro-descendents."

Africa wishes to consolidate its democracy and achieve food and energy self-sufficiency, and Brazil can help in these areas through investments in logistics projects and training, the former president said.