Brazil establishes itself as “major political and economic actor” in Angola and Mozambique

21 May 2012

Brazil is establishing its place as a “major political and economic actor,” in Angola, Mozambique and in other African countries, with its companies investing in the same sectors as important Chinese and Indian investors, according to researcher Loro Horta.

In an article entitled, “The Embrace of the Anaconda: A rising Brazil enters Africa,” published this month in the Latin Business Chronicle, Horta said that the growing Brazilian presence has gone unnoticed, as the focus has been on China and India, which are two other large emerging economies.

“A rising Brazil with a growing powerful business community is eager to find new markets to invest its new found wealth,” the researcher said.

Brazilian companies are implementing projects in countries such as Malawi, Zimbabwe, and Namibia, but the main destination for Brazilian investment is Portuguese-speaking African countries, particularly Angola and Mozambique, he noted.

The Mozambican economy is due to receive the biggest ever Brazilian investment in Africa: A railroad costing US$ 1.7 billion launched by mining group Vale.

“Most Brazilian investment is likely to go to the mining sector in particular to coal mining,” he said.

However, agriculture is also an important target for Brazilian investment, and according to recent news the Mozambican government wants to attract cotton, soy, and maize producers to the country, and plans to make land available for this.

Another focus has been biofuel production for which the Brazilian government has earmarked a US$97 million credit line for small agricultural projects, which was later increased to US$300 million.

In Angola Brazilian investment rose 20-fold between 2002 and 2008 and involved groups such as Petrobras, Odebrecht, Andrade Gutierrez, and Vale.

This month a new credit line worth US$2 billion for Angola was officially set up in Brasilia by the Brazilian government.

During a visit to Angola Brazil’s president Dilma Rousseff said that the principles of Brazil’s involvement in Africa were to make efforts to hire Africans, to make technology transfer a priority, to set up partnerships with local partners, and to respect local laws.

According to Horta, “it is no coincidence,” that Rousseff made these statement in Angola, where Chinese companies have been criticised for not hiring local workers, and thus the Brazilian position demonstrates its “growing competition with another rising power who has in the past decade been building an impressive presence throughout the continent: China.”

Although China’s larger presence in Angola is unquestionable, officials from the Brazilian delegation, “made a point of noticing that Brazilian companies are the biggest foreign employers in the country,” Horta said. (macauhub)