AFRICANGLOBE – Brazil’s role as a trade partner with Africa is increasing, but the political links between the continent and Brazil may prove more important.
In December, senior representatives of the Chinese and Brazilian foreign ministries met in Beijing for what was billed the ‘second China-Brazil consultation on African affairs’. They claimed to have expanded their consensus on Africa issues, but to what extent does such a consensus exist?
It is understandably tempting to draw parallels between China and Brazil’s economic and political engagement in Africa, and both have generated much speculation. But how similar are the two emerging powers’ interactions with the continent?
Each to His Own
While Brazil is often held up as the ‘new China’, the two countries have very different motivations for their presence in Africa. Unlike China, Brazil is relatively self-sufficient in terms of natural resources, and as a result Brasilia has not pushed the Chinese model of large-scale resource-backed infrastructure deals.
As far as Brazil’s exports are concerned, Africa has nowhere near the strategic importance of markets in China, the US, or even Argentina. As such, it seems that Brazil’s relationship with Africa has thus far been predominantly political rather than commercial.
Since the first term of former president Luiz Inácio Lula da Silva (2003-10), the Brazilian government has strengthened its diplomatic ties across Africa.
After taking office, Lula quickly doubled the budget of the Itamaraty (Brazil’s foreign ministry), leading to a concerted expansion of embassies in developing countries in general, especially in Africa. Brazil now has 37 embassies on the continent – more than the UK, a former colonial power. Between them, Lula and his foreign minister Celso Amorim visited Africa 80 times between 2003 and 2008.
Furthermore, Brasilia often invokes its historical, social, linguistic, and cultural links with Africa as a means to position itself as a ‘natural’ partner. Lula often spoke of an “historic debt” that Brazil owes to Africa, a reference to the historical exchanges between Africa and Brazil in terms of culture, traditions and people (Brazil is home to more people of African descent than any other country outside Africa).
Although domestic rather than foreign policy appears to be the priority of the current president, Dilma Rousseff, she has continued to chart a similar course.
Notably, she has talked of a shared experience of colonialism and last year spoke of building a relationship with Africa entirely free of the “colonial practices that devastated my continent and the African continent, free of all the colonial hells that we lived”.
There are clear links between these two parts of the world, but promoting them is also a diplomatic exercise. Such overtures towards Africa fit Brazil’s more general policy of presenting an image of being a benign and neutral leader among developing countries.
This strategy is astutely designed with the objective of giving Brazil more projection in multilateral forums such as the World Trade Organisation (WTO), and of achieving the government’s long-standing ambition to securing a permanent seat on the UN Security Council.
Brazil Getting Down to Business
Alongside the political push, trade between the two regions has grown in total value over the last ten years, covering a wide range of sectors including oil and gas, fertilisers, beef, agricultural produce, minerals and automobiles. However, data from 2010 shows that Africa still only accounts for 5.3% of Brazil’s total trade, a percentage that has decreased steadily since 2007, while trade with Asia has increased.
Nevertheless, while Brazil’s strategy is political in emphasis, Brazilian businesses have often been central to the government’s outreach programme. Lula and Rousseff have both fiercely advocated the formation of ‘national champions’: Brazilian conglomerates that expand the country’s clout abroad and that aim to become worldwide market leaders.
To this end, the Brazilian state, via the Brazilian Development Bank(BNDES), often supports its private companies’ African investments, taking advantage of its financial strength as a means to demonstrate Brazil’s increasing global prominence. In Africa, Brazil’s major construction and extractive firms – such as Petrobras, Vale and Odebrecht – have led the way in terms of investment and sales volume.
And while Brazilian investment in Africa remains a fraction of China’s,investment value grew from $69 billion to $214 billion between 2001 and 2009. There have been particularly large investments in Lusophone Africa, often facilitated by credit offered to Brazilian companies by the BNDES: in Angola, BNDES credit has reached $3.2 billion. Notably, while Chinese policy banks such as the China Exim Bank typically provide finance direct to African governments, the BNDES supports the expansions of Brazilian firms rather than foreign administrations.
Further, Brazilian firms have often had to negotiate conflicting pressures from Brasilia: to promote Brazil abroad, but also to prioritise domestic investment and job creation in a time of diminished growth. This is in contrast to Chinese policy whereby in the past decade, Chinese state-owned enterprises have often been charged with a mandate to aggressively expand at all costs in Africa. Brazil’s expansion has been more cautious.
An Uncertain Future
Brazilian investment in Africa is likely to continue in coming years. But as more investors inevitably make decisions in Africa on the basis of private interest and commercial returns, Brasilia may find it difficult to protect its national brand.
Private actors with differing agendas are becoming ever more visible, and there is a risk that this will undermine Brazil’s political project of portraying itself as a partner which always prioritises mutual benefit in a spirit of co-operation and equality.
By; Alexandra Reza