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Brazil and Africa ready to tango

By Servaas van den Bosch | Last updated: Jul 19, 2011 - 2:39:51 PM

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WINDHOEK (IPS/GIN) - African trade with India and China flourished over the past decade but, with unemployment rising and industrialization failing to take hold, cracks are appearing in Africa's much-vaunted “Look East” doctrine.

Meanwhile, from across the Atlantic, Brazil is making inroads into the continent.

Could relations with the Latin American powerhouse present a more viable alternative to the East in Africa's South-South relations?

In June a newspaper photo of former Namibian president Sam Nujoma must have raised some eyebrows at breakfast tables across the country. A grinning 82-year-old stared up from front pages, intimately flanked by a pair of equally jubilant but scarcely clad Samba dancers.

The former president's chirpy mood was—at least in part—explained by the Brazilian oil and gas exploration company High Resolution Technology (HRT) hosting a prestigious launch party in the Namibian capital, where the photo was taken.

HRT will be drilling for the black gold off the Namibian coast and expressed confidence that the southwest African nation will soon join the ranks of oil producers.

As remarkable as its $400 million investment is the commitment to the continent's well being that Brazilian investors express.

In Namibia, Brazil was instrumental in setting up a navy equipped with Brazilian ships and, on the country's northern border, stores stock Brazilian furniture to service the Portuguese-speaking Angolan market.

HRT Chief Executive Officer Marcio Rocha Mello at the launch praised the country's stable economy and accommodating legal framework. He also committed one Namibian dollar (0.15 U.S. dollar) per barrel to the preservation of marine reserves.

While perhaps a hollow offer as so far no oil has been found, it's also a gesture few of the Chinese state-owned firms presently rummaging through the continent for resources would care to match.

And, in a nutshell, it perhaps signifies the different approach the Brazilians are thought to take to investment which, in contrast to China's no-strings-attached policy, is often accompanied by social programs or aid.

Of course Namibia is not the only African country targeted by Brazil. Brasilia has historically looked towards lusophone Africa.

In Mozambique, for instance, diversified Brazilian mining company Vale in May opened a $1.7 billion coal plant, the largest once-off investment the southeast African country has ever seen. In two years the world's second largest miner will export 11 million tons of coal annually from the Moatizi mine.

At a recent mining conference the company announced it would continue to invest in Africa a total of $12 billion over the next five years.

This is not an isolated event. Some 500 Brazilian companies are active in over 30 African countries. Writing in a recent paper, researcher Gerhard Seibert from the Lisbon University Center for African Studies says Angola alone hosts more than a 100 Brazilian companies.

Some giants with long-standing interests in Africa are oil company Petrobras, active in Angola since 1979 and now present in virtually every oil-producing country, and construction company Norberto Odebrecht that in the early 1980s started operations in Angola, using the country as a gateway into the continent.

Many companies are supported by extensive credit lines from the state-owned Brazilian Development Bank.

While Brazil's relationship with Africa precedes the recent upsurge in Chinese involvement by decades, President “Lula” da Silva revived Brazil's interest in the continent, in step with the objectives of the India-Brazil-South Africa forum.

During his 12 official visits he doubled the number of Brazilian embassies in Africa and boosted trade from $3 billion in 2000 to $26 billion in 2008.

“Politically and historically the context of Brazil's engagement in Africa has changed considerably,” notes Mr. Seibert about the “Lula years.”

Brazil's trade with the continent stood at $20 billion in 2010. This is still dwarfed by China's $107 billion worth of trade with Africa, but is not much lower than that of the other emerging market giant India, which stands at $32 billion.