São Paulo – The 53 African countries grow at an annual rate higher than the world average, and will require foreign investment and technology in the coming years. The continent will need investment in the banking sector, telecommunications, infrastructure, services, agriculture and energy. These are some of the opportunities for Brazil that were presented during the “Meeting with Brazilian businessmen on investment in Africa” promoted by the Lula Institute, the Brazilian Federation of Bank Associations (Febraban) and the Federation of Industries of the State of São Paulo (Fiesp) this Wednesday (16th) in São Paulo.
The chairman of the Brazilian Development Bank (BNDES), Luciano Coutinho, said the institution lends money to five African banks and stressed that the Brazilian president, Dilma Rousseff, has spoken for the funding of Brazilian projects targeting African countries. Coutinho stated, however, that Brazil is yet to tap into opportunities in different sectors of the continent’s economy than those in which it already participates.
“There are sectors yet untapped by Brazilian companies such as banking, telecommunications, retail and wholesale, tourism, cosmetics, medication, and pharmachemicals,” said Coutinho.
According to him, the continent’s Gross Domestic Product (GDP) grew at an average annual rate of 6.8% up until 2008, when the international crisis erupted. The rate dropped to 2.7% in 2009, reached 5.4% in 2010, is expected to be 5.2% this year, and then reach 5.8% in 2012.
“Some African countries grow at rates of up to 15% a year. The continent’s GDP is US$ 1.7 trillion and should be US$ 2.7 trillion within ten years,” said Coutinho upon discussing investment opportunities in Africa.
The Fiesp president, Paulo Skaf, claimed that African countries also offer opportunities to businessmen interested in investing in manufacturing industries. The Fiesp Foreign Trade director, Roberto Giannetti da Fonseca, however, said Brazil needs to negotiate old debts of the African countries before the BNDES can finance new projects.
“There are minor unpaid debts from loans taken in the 1980s, 1990s. These are debts amounting to US$ 10 million, US$ 15 million, which prevent Brazil from lending hundreds [of millions of dollars] to some countries. In addition to those, we also need good guarantees that the [new] loans will be paid off,” he said.
Bilateral trade between Brazil and African countries reached US$ 20.5 billion in 2010. Brazil imported the equivalent of US$ 11.2 billion and exported the equivalent of US$ 9.2 billion. Skaf forecasts that the trade volume between Brazilians and Africans should double within three years and reach US$ 60 billion in seven years. “The expected annual growth for Africa in 2012 is 5.8%, whereas Europe and Japan are in trouble. Whenever a country’s GDP grows, its trade multiplies. By 2018, the flow of trade [between Brazil and Africa] may reach US$ 60 billion.”
The chairman of the Global Alliance for Improved Nutrition, Jay Naidoo, stated that Brazil is regarded as a role model because it developed advanced agricultural technology. He said the continent needs partnerships, and wants to attract Brazilian businessmen. “Right now we have lands being occupied by foreigners, people from other countries. That’s alright. However, we want to be helped to attain self-sufficiency [in farming] and we want our people to be respected,” he said.
The Sudanese ambassador to Brasília, Abd Elghani Elnaim Awad Elkarim, who attended the meeting, mentioned success cases of Brazilian companies such as Dedini, which supplied machinery and equipment to the first Sudanese ethanol plant, and the Pinesso group, which produces agricultural commodities in the country. “This is proof of the trust the Sudanese have in Brazilian enterprises,” the diplomat told ANBA during a visit to the Arab Brazilian Chamber of Commerce following the meeting at Fiesp.
Elkarim highlighted the “leadership” of former president Luiz Inácio Lula da Silva, founder of the namesake institute, in promoting relations between Brazil and Africa. “And we are glad that president Dilma has continued along the same path,” he said. “Brazil seems determined to go on maintaining strong ties with Africa,” he added.
The vice president for infrastructure at the African Development Bank, Bobby Pittman, stated that businessmen willing to profit in Africa must structure themselves to reap the fruits of the continent’s growth, develop corporate governance actions, and realize the opportunities that the crisis brings. “Those who invested in China, the United States and Brazil thought they had diversified portfolios, but in 2009 the Nairobi Stock Exchange, in Kenya, did well during the crisis,” he said, comparing the performances of these countries’ stock markets.
*With the collaboration of Alexandre Rocha. Translated by Gabriel Pomerancblum
