São Paulo – One of the most outstanding features of Africa, which comprises 53 countries, is its diversity. There are different races, languages, religions, habits and levels of economic development. A significant portion of the nations share the influence of European colonization, relatively recent independence processes, and the fact that they represent a new market for companies based in large emerging countries such as Brazil, China, India and Turkey.
The Foreign Trade secretary of the Brazilian Ministry of Development, Industry and Foreign Trade, Welber Barral, claims that Africa has a stronger demand for industrialized goods and less trade barriers than wealthy nations, such as the United States and the European Union, which are traditional targets of Brazilian exports. “It is a more open market,” he stated.
Africa nations usually maintain strong trade relations with their former metropolises. Thus, former French colonies do lots of business with France, former British protectorates deal heavily with the United Kingdom, and so forth. Companies based in Brazil and in other emerging countries are now opposing this logic.
Language is a facilitator of trade between Europeans and their former colonies, and although Brazil has never colonized any country, many entrepreneurs seek to do business with former Portuguese protectorates.
Angola, for instance, is one of the most sought-after countrise by Brazilians in the continent. In the first half, according to data supplied by the ministry, the country was the third largest target of Brazilian exports to Africa.
The Odebrecht group is among those operating in Angola, in the fields of construction, mining, and oil drilling. The company is also present in Mozambique, another Portuguese-speaking country.
Petroleum
Angola is one of the countries pointed out by specialists as promising for Brazilian businessmen. Aside from the ease of communication, the country is oil-rich, and oil exports are boosting its economy. The availability of commodities also makes it easier to obtain business financing, because they may be used as a guarantee, as shown by ANBA in another article about Africa, published Monday morning (12th).
“All oil-producing countries are good markets,” said the vice president of the Brazilian Foreign Trade Association (AEB), José Augusto de Castro. These include countries such as Nigeria, Algeria and Libya, respectively the fourth, fifth and seventh leading targets of Brazilian exports to Africa.
Egypt is the largest market for Brazil in the continent, having imported the equivalent of US$ 733 million in the first half this year. Next comes South Africa, the leading African economy, with US$ 633 million. “Not only is Egypt the leading target, the trade balance with the country is also heavily tipped on the Brazilian side,” said Barral. The trade surplus in the first six months this year was US$ 676 million, a significant figure at a time in which Brazilian imports are growing more than exports.
Even though Egypt is already an established market, Barral claims that the importance of Egypt for Brazilian exports may increase even further, because the country is about to sign a free-trade agreement with the Mercosur. The South American bloc already maintains a fixed tariff preference agreement with Southern African countries, among which South Africa stands out. Brazil has a strategic alliance with the South Africans, known as the IBSA Dialogue Forum, which also includes India.
Barral also underscores opportunities in the Maghreb countries, especially Algeria, Morocco and Libya. The secretary general of the Arab Brazilian Chamber of Commerce, Michel Alaby, calls attention to the fact that historically, Algeria runs a huge trade surplus with Brazil, to which it is the second leading oil supplier, after Nigeria. “Brazil deserves greater presence in Algeria because of this deficit,” he declared.
Libya, another strong oil producer, became a target for Brazilian enterprises in the last few years, especially construction companies. Andrade Gutierrez, Odebrecht and Queiroz Galvão are present in the country.
Agriculture
Morocco, the sixth largest Brazilian market in Africa, is a major supplier of phosphate minerals to the Brazilian fertilizer industry. According to Alaby, the country is currently negotiating an energy cooperation agreement with Brazil that may lead to future production of ethanol in Moroccan territory. This represents an opportunity for exporters of agricultural machinery and for manufacturers of sugar and alcohol industry equipment.
To Alaby, the industries with the most business potential in Africa are agricultural machinery, vehicles, building material, medical equipment, and food. With regard to agriculture, he also mentioned Sudan, the largest country in the continent, as a market to be tapped into further by Brazilian companies.
The Brazilian president Luiz Inácio Lula da Silva has said more than once that Brazil is going to help Africa promote its own green revolution. In the public sector, the Brazilian Agricultural Research Corporation (Embrapa), a reference in the sector, is implementing a series of projects in cooperation with African governments and has an office in Ghana. More recently, private enterprises are eyeing business in the sector in the continent with greater interest.
Africa is already regarded as a new agricultural frontier, for instance, by Arab countries in the Gulf, which have little space for food production, and are investing in African countries to meet their domestic demands.
*Translated by Gabriel Pomerancblum
