Business and Finance

Brazil looks to boost investment in Africa

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RIO DE JANEIRO and LAGOS: Marcos Abete moves quickly across his office in Brazil’s commercial hub of Rio de Janeiro. It’s early morning and he is already fielding calls from across Africa. For him, this is a normal day.

“We have just opened an office in Lagos and hope to keep the momentum going,” the Brazilian of Nigerian ancestry told as he speaks in an English that sounds more British than South American or African.

“My company is a small export-import business, but we are growing and want to start creating and manufacturing our own products, so we started two shops in Africa to do that. It is very exciting,” he added.

With Brazil’s economy moving positively forward, many businesses are looking to Africa as the place to invest.

Brazilian companies are moving into Africa amid a government drive to build closer economic ties with the continent.

Here in Nigeria, the government believes that enticing South American, and importantly Brazilian, companies to enter the market can be a boost to the overall economy and job creation.

An economic advisor for President Goodluck Jonathan told recently that they are witnessing an “unprecedented Brazilian interest in the country and the region. And we want to take advantage.”

A year ago, Brazilian mining giant Vale exported its first overseas coal shipment from Mozambique.

The shift of 35,000 metric tons of thermal coal from the port of Beira in Mozambique to the United Arab Emirates marked the southeastern African country’s emergence into the global minerals market.

It was part of Vale’s ambitious push into the country, and its plans to double capacity to 22 million tons of coal annually over the next few years.

Vale, which operates across several African countries including Angola, the Democratic Republic of Congo and South Africa, has been in Mozambique since 2004.

Thermal coal was mined from the company’s Moatize concession in western Mozambique, an area believed to hold one of the world’s biggest untapped reserves.

Vale is also making a broader pitch to access the country’s natural resources.

It is spending millions on infrastructure, including a railway line passing through Malawi and connecting its Moatize facility with Nacala, the largest deep-water natural port on Africa’s eastern coast.

The company plans to spend more than $12 billion across the continent over the next five years.

Over the last few years, Brazil’s state and private firms have quietly made inroads into the continent, operating mostly in strategic sectors such as infrastructure, energy and mining.

Odebrecht, Brazil’s largest construction company, and Petrobras, a state-controlled energy group, have also stepped up their African operations in recent years.

Trade between Brazil and Africa has jumped from around $4 billion in 2000 to about $20 billion in 2010.

And for those like Abete, who don’t own a large multinational, the hope is that Africa will offer a new market that is cheaper than in Brazil and that can help develop mutual relations between all parties involved.

“We see Africa as the future and hope for great progress,” he added.


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