Brazil into Africa

| June 30, 2016 | 0 Comments
Big Brazilian corporations, such as Petrobras, along with medium and small businesses, operate in Angola. (Photo: Marcello Casal Jr/ABr)

Big Brazilian corporations, such as Petrobras, along with medium and small businesses, operate in Angola. (Photo: Marcello Casal Jr/ABr)

As China’s growth engines sputter, Europe remains weak and India focuses inward, African economies correspondingly retrench severely. Where African nations once were growing at a steady five percent a year, thanks to Chinese demand, now much of sub-Saharan Africa is increasing its GDP per capita at only two and three percent a year, with South Africa barely achieving one-percent growth. Until very recently, Brazil was playing a major role in strengthening African economic performance, but now, engulfed by corruption and leadership scandals at home, even Brazil, with its own weakening economy, has begun to withdraw from its tight embrace of key sections of sub-Saharan Africa.
Brazil has much more to offer to a modernizing sub-Saharan Africa than it is now providing or can realistically provide. Given its proximity to Africa, its size (a third of the African continent south of the Sahara desert), its comparative wealth, its long association with Africa from the slave-trading era, its political and economic successes after decades of authoritarian military rule, its educational levels, its superior technical and financial knowledge, its detailed involvement with urban problems and solutions and its vast (and environmentally insensitive) experience taming and destroying swaths of inhospitable environment, Brazil’s interactions with, and influence upon, the destiny of sub-Saharan Africa today remain underwhelming.

Nigeria is energy short, so Odebrecht is helping President Muhammadu Buhari’s government realize of its development goals. (Photo: Chatham House)

Nigeria is energy short, so Odebrecht is helping President Muhammadu Buhari’s government realize of its development goals. (Photo: Chatham House)

This failure to play a major transformative role in Africa is especially telling since Brazil and South Africa are anointed middle powers linked via BRICS to the global juggernauts (but weakening economies) of China, India, and Russia.
Despite its traditional South American focus and Western Hemispheric ties, Brazil possesses the kinds of entrepreneurial and governmental talent that is lacking in much of sub-Saharan Africa, and that is much needed to assist African nations as they emerge from the grip of underdevelopment. Even if Brazil continues to grow more slowly than China, it has an under-used capacity to assist African states to thrive and their people to continue to improve domestic standards of living.
In 2013, Brazilian trade with Africa reached nearly $29 billion, up from $4 billion in 2000. However, sub-Saharan Africa represented but three percent of Brazil’s total overseas trade. Brazil’s largest sub-Saharan African trading partners in 2014 were Nigeria (32 percent of the total), Angola (16 percent) and South Africa (7 percent). Half of all exports were manufactured products, sugar and meat, with capital goods exports increasing in very recent years. Imports consisted primarily of resource commodities such as petroleum, coal and iron ore.
Brazilian industries are active in 22 African countries, predominantly in southern Africa (Angola, Mozambique, and South Africa). There are the big corporations — Petrobras, Andrade Gutierrez, Vale do Rio Doce, Camargo Correia and Odebrecht — and a raft of small- and medium-sized enterprises such as O Boticario (a cosmetics company) and Akzo Nobel (chemicals and pharmaceuticals), both of which work in Angola. In sub-Saharan Africa, small- and medium-sized firms own supermarkets, process manioc (cassava), make ceramics, supply and maintain software and grow flowers.

Odebrecht, a major Brazilian construction firm, operates this bio-energy project in Angola. (Photo: Odebrecht collection)

Odebrecht, a major Brazilian construction firm, operates this bio-energy project in Angola. (Photo: Odebrecht collection)

Petrobras pumps oil in Angola and Nigeria and searches for new deposits in Benin, Gabon, Mozambique, Namibia and Tanzania.
Odebrecht, a major construction company, has been active in Angola since the 1980s, building a big dam near Malanje and the country’s first shopping mall in Luanda. Odebrecht is Angola’s largest employer. This company also has constructed residential condominiums, worked with Petrobras on oil and gas installations and has been active in food distribution in South Africa, Botswana (where it built an important dam), the Democratic Republic of Congo, Djibouti (fuel terminals), Gabon (oil-well services), Liberia and Mozambique. Camargo Correia has erected social housing in Ghana and urban planning initiatives and housing in Angola, where it has also built roads and power lines. In Mozambique, it constructed a hydroelectric project on the Zambezi River downstream from the Cahora Bassa dam. Andre Gutierrez, another construction firm, builds harbours, housing and sanitation projects in Angola, Cameroon, the Democratic Republic of Congo, Equatorial Guinea, Guinea, Mali, Mauritania and Mozambique.

Former Brazilian president Luiz Inacio Lula da Silva built strongly on the Africa relationship. (Photo: UN PHOTO)

Former Brazilian president Luiz Inacio Lula da Silva built strongly on the Africa relationship. (Photo: UN PHOTO)

Nigeria is woefully energy short. As sub-Saharan Africa’s most populous nation, with at least 200 million people and a predicted 730 million by 2100, its cash-starved electrical generating capacity is no larger than that of Washington, D.C. or Ottawa. (Spain produces more power than all of sub-Saharan Africa.) For that reason, Odebrecht is helping Nigerian President Muhammadu Buhari’s government to realize many of its development goals. When Benco Energy of Brazil completes the construction of a $900-million, 700-megawatt oil-fired electricity-producing facility in Bayelsa State, probably in 2019, Nigeria should begin to meet more of its needs for power.
Vale’s enterprise near Moatize in Mozambique digs up 4,000 tonnes of coal an hour, and ships it to Brazil and China via a newly reconstructed, newly repurposed rail line through Malawi to the Mozambican port of Nacala, 620 miles (997 kilometres) northeast, much of it built by Odebrecht. It is Vale’s largest undertaking outside of Brazil. Vale is Mozambique’s major employer and investor, but its alleged abuses of African labour and its removal of more than 1,000 families to make room for the mine has been the subject of significant protests by local communities. They claim that their new settlements are less fertile and less well-watered than the original ones. In Guinea, too, Vale has been accused of using underhanded tactics to acquire a central iron ore mining concession.
Vale began to invest in Africa in 2004 and, in addition to Mozambique and Guinea, has had projects in the DRC, Gabon, Guinea-Bissau and South Africa. Between 2010 and 2015, it invested almost $20 million south of the Sahara. Beyond coal, it mines copper and cobalt in Angola and has explored for nickel.
Marcopolo is one of the biggest manufacturers of bus bodies in the world. It set up operations in 2000 in South Africa’s Gauteng Province and expanded in 2008, being one of the few Brazilian companies that has been successful in sub-Saharan Africa outside of the resource extraction and related pursuits area and excluding construction.
The big difference between Brazil and China in Africa is that Brazilian firms routinely hire Africans and claim, despite the Vale experience, to treat their workers well. Chinese companies refuse as often as possible to employ Africans, sometimes even as labourers on construction projects, and are much more reluctant than the Brazilians to transfer technological and managerial expertise to their African employees and subsidiary enterprises. In 2012, 90 percent of Odebrecht’s workers and 85 percent of Vale’s were indigenous and local.

Outreach to Africa
As far back as the 1970s, Brazil actively tried to build capacity in Africa in a few technical areas, but primarily in Lusophone countries (those with Portuguese colonial histories). By the end of that decade, technical co-operation between Brazil and several African countries was under way, and Brazil diplomatically was beginning to pay attention to Africa, virtually for the first time since the 19th Century. But Brazil was absorbed then, and throughout much of the remainder of the 20th Century, in establishing its own post-military democratic path, and in modernizing its own economy. It was not really until the end of the century, after sufficient progress socially and economically had been made at home, that Brazil was in a position to look seriously across the Atlantic Ocean to Africa. By then, it was a strong force in the Western Hemisphere, competing with the United States and its South American neighbours for prominence and global notice. It had reached the threshold of middle-power status; Africa finally could become part of Brazil’s foreign-policy strategy.
Brazil more and more acknowledged, at least for overseas policy purposes, that Brazil and Africa had a common heritage derived primarily from Brazil’s former status as the globe’s greatest and last major slave importer (from the 15th Century to 1888), from the inescapable fact that 60 percent of all African slaves exported from their own homes were imported into Brazil, and that African culture, art and religion had all contributed to the existential mix that is modern Brazil. No nation outside of Nigeria, Brazilians like to remind themselves, has so many Africans as citizens. In no other country have Africans played such important roles in economic and social growth over more than a century.
Like Cuba, Brazil is very Afro-influenced, having received (unwilling) Africans for centuries and having absorbed much of their cultural and religious underpinnings. A number of now indigenous Brazilian “traditional” religious practices are African in origin even if they have, over the years, been infused with belief systems from different sections of the African continent.
Many slaves arrived from Angola, directly across the Atlantic Ocean, but captives were transported from what are now the Democratic Republic of Congo and Zambia — and Gabon, Cameroon, and Nigeria also count among the many enforced sending areas that, together, have enriched Brazil.
As strong as is the role of Africa in the essential patrimony of modern Brazil, however, “colour” and Afro-ness are themes that run beneath the surface harmony of South America’s largest nation. Discrimination is a reality, too, although publicly acknowledged (as in Cuba) only at the margin. In some senses, Brazil’s “partnership” with Africa has been based on a long-lived, but ambiguous, sense of kinship and affinity.
The presidency of Luiz Inacio Lula da Silva (2003-2010) built strongly on these traditional foundations. He inaugurated, largely for the first time in Brazil’s modern history, a serious and sustained attempt to engage with the nations of sub-Saharan Africa. He made state visits to 29 countries on 12 separate occasions, encouraged his foreign ministry to pay close attention to Africa, and sanctioned the opening of 19 of 37 Brazilian embassies in Africa. Lula da Silva also announced a series of collaborative scientific projects with Angola, Mozambique, Namibia, Săo Tomé and Principe and South Africa. Those initiatives were intended to draw heavily on Brazilian expertise, to train local scientists, offer university technical and scientific training to undergraduate and graduate students from Portuguese-speaking African countries, and to send teachers from Brazilian universities to Africa.
Likewise, Banco National de Desarollo Economico y Social — BNDES, Brazil’s national development bank — began disbursing nearly $3 billion in grants and loans to Africa after 2007 and the Brazilian Co-operation Agency (Agencia Brasileira de Cooperacao — ABC) and the Brazilian Agricultural Research Corporation (EMBRAPA) began backing projects across the continent.

Rousseff reduced focus on Africa
“President Lula’s attitude was new,” commented a minister of social development. “Before him, Brazil had its back turned to Africa. The need to go there, do propaganda, transmit openness, was very pressing.”
But his approach to Africa was not sustained after he left the presidency. After Dilma Rousseff became president in 2010, she significantly reduced all of Brazil’s foreign engagements, especially those centred on Africa. Her approach to Africa was more pragmatic than her predecessor’s and a reflection of her personal priorities as well as Brazil’s diminished national financial resources. However, her administration did forgive the debts of the oil- and gas-rich Republic of Congo, copper-dominant Zambia and Tanzania. Collectively, those three countries owed Brazil (from the 1970s) more than $700 million. Owing smaller amounts, but also benefiting, were Cote d’Ivoire, Gabon, Guinea, Guinea-Bissau, Mauritania, the Democratic Republic of Congo, Săo Tomé and Principe, Senegal and the Sudan — a mélange of nation-states with which Brazil once had dealings. That cancellation made it possible for Brazilian corporations legally to invest in the petroleum, natural gas, coal, iron ore and other resource extraction opportunities presented by Africa. But this well-intended action by Rousseff was criticized roundly from the left and the right for its failure to distance Brazil from African autocracies, and its failure to accomplish much for Brazilian foreign investment. O Globo headlined its front-page article “Dictators Forgiven.”
Nevertheless, Brazilian entrepreneurs appreciated Africa’s resource opportunities. Realizing that Brazil was losing business opportunities to China, after 2010 Brazil rapidly ramped up its presence on the continent, especially in Angola, Nigeria and Ghana, the better to bid for infrastructural construction opportunities. China had 40 percent of the market in that area, Brazil only three percent. Odebrecht and other Brazilian concerns won major mining concessions (as in Mozambique and Guinea). Manufacturers (as in buses and cosmetics) did the same. But now that Brazil’s economy has crashed and its politics are all inward-looking, Africa has become a less likely arena for Brazilian corporate and diplomatic endeavour.
This pulling back from Africa has now been accelerated by turmoil in Brazilian political and industrial circles, by the jailing for corruption of many corporate leaders, including the head of Odebrecht, by indictments against Lula da Silva, and by successful impeachment proceedings against Rousseff herself, now replaced by interim President Michel Temer. Brazil is coping with its own problems, not advancing toward Africa. Thus, what was once a promising engine of growth for Africa, and a major partnership in the agricultural and educational arenas, has now sundered on the shores of home-grown greed and chicanery. Africa and Africans are the losers, now more than ever beholden for betterment and prosperity primarily to China. When Brazil, under renewed political leadership, recovers sufficiently to again look outward, Africa and Africans will benefit from Brazilian investment, Brazilian imports and Brazilian co-operative assistance.

Robert I. Rotberg was a fellow at the Woodrow Wilson International Center, senior fellow at the Centre for International Governance Innovation and founding director of Harvard’s Kennedy School program on intrastate conflict.

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Robert I. Rotberg is Fulbright Research Professor at the Norman Paterson School of International Affairs, Carleton University and a senior fellow at the Centre for International Governance Innovation.

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