Lula loves Africa but China’s a bigger friend

2010-07-10 10:39

Brazilian firms could start tapping the debt market in South Africa.

This has emerged as Brazil’s Luiz ­Inacio Lula da Silva winds up his final ­presidential tour of


Lula has worked hard to increase

trade with other emerging economies as they play an ever greater global role and

has taken advantage of Brazil’s strong cultural links with Africa. He has visited more than 25 African countries,

six on this trip.

Brazil, with the world’s largest black African population after

Nigeria, ­tripled its exports to Africa to

$8.7 billion (about R66 billion) last year. Yet it lags behind China’s expansion

in ­Africa.

“Brazil in general pays very little attention to Africa,” said Rubens Barbosa, a former Brazilian

diplomat who is president of the council on foreign trade at Sao Paulo business

group FIESPI.

“I don’t think that to travel six or seven times to Africa opens markets to Brazilian products or markets.”

The proportion of Brazil’s trade taken up by Africa dropped from 7% in 2008 to 5.6% as of this May.

Its trade with Africa is still dominated by a

handful of countries such as Nigeria, Angola, and South Africa and by a few large companies such as miner Vale

and oil firm Petrobras.

Experts say a lack of funding compared to Chinese rivals has also

hindered Brazilian firms expanding in Africa.

That could result in Brazilian firms tapping the debt market in

South Africa for the first time, said Eduardo

Centola, the Brazil-based Americas head of South Africa’s Standard Bank Group.

“There are clear opportunities for Brazilian companies issuing

bonds in South African rands,” he said.

– Reuters

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