Brazil cancels $900 million in African debt

Brazil cancels $900 million in African debt

ADDIS ABABA - Ethiopia
Brazil cancels $900 million in African debt

Brazilian President Dilma Rousseff (L) greets Egyptian counterpart Mohammed Morsi (R) as their Djiboutian counterpart Omar Guelleh (Center L) looks on, during a summit marking the 50th anniversary of the founding of the African Union, in Addis Ababa, Ethiopia, on May 25. AFP photo

Brazil said May 25 it plans to cancel $900 million (700 million euro) worth of debt in 12 African countries, as part of a broader strategy to boost ties with the continent.

"The idea of having Africa as a special relationship for Brazil is strategic for Brazil's foreign policy," presidential spokesman Thomas Traumann told reporters on the sidelines of African Union celebrations to mark 50 years of the continental bloc.

Brazilian President Dilma Rousseff was in Addis Ababa for the celebrations, her third trip to Africa in three months. Among the 12 countries whose debts were pardoned, Congo-Brazzaville was the highest with a $352 million debt cancelled, with Tanzania's $237 million debt the second largest.

Traumann said the move was part of Brazil's efforts to boost economic ties with Africa, home to some of the world's fastest growing economies.

He added that Brazil recently established an agency to support investments in industry and development in Africa and Latin America.

"The idea is to concentrate Brazilian help," including in agriculture, social programs, as well as direct financial support of Brazilian companies, he said.

Rousseff, visiting the Ethiopian capital for the AU celebrations, has met with several African leaders including Ethiopian Prime Minister Hailemariam Desalegn, with whom she signed a series of cooperation agreements on agriculture, education, air transport and science.

Brazil's interest in Africa is part of a larger trend boosting so-called South-South cooperation, which has attracted investment from emergent economies in developing countries, namely in Africa. Today's 54-member AU is the successor of the Organisation of African Unity (OAU), established in 1963 in the heady days when independence from colonial rule was sweeping the continent.

Brazil, one of five members of the BRICS emerging nations group and with a GDP of $2.425 trillion in 2012, is the world's seventh largest economy. The Brazilian economy, with its population of 196 million people, is forecast to grow 3.5 percent this year.