BRAZIL IS MOVING INTO AFRICA

Sarah,

There is a new trend of developing countries investing in Africa.  Brazil is growing fast, (it just surpassed Britain to become the sixth largest economy) and is the latest country to join the party.  This intrigues me because Brazil and Africa have an interesting history.  Let’s talk about it.

HISTORY WITH AFRICA:

The Slave Trade:

Brazil was a Portuguese colony.  The Portuguese were the original slave traders, establishing an slave trading agreement with an African ruler as early as 1494.(about the time of Columbus' journey)  By the 1540’s, Portugal had established sugar plantations in its new colony of Brazil and began importing slave labor to work the fields.  Between 1519 and 1867, more slaves found their way to Brazil than any other location in the Americas. (38% went to Brazil while 7% went to North America)  Brazil was also the last country to stop importing slaves, continuing the practice until 1831.  Note that this means slaves were imported from Africa to Brazil for over 300 years.

Rio: Capital of the Portuguese Empire:

In the early 1800’s Napoleon conquered Portugal and the Portuguese Royal Court fled to Brazil.  Thus for a brief spell in the beginning of the 1800’s, the Portuguese Empire and its African holdings were administered by officials in Rio de Janeiro.

Common Language:

As a result of Portuguese imperialism, the African countries of Angola, Mozambique, Guinea- Bissau, Cape Verde, and Sao Tome and Principe speak Portuguese.

INVESTMENT TODAY:

In the last ten years, Brazil’s focus has turned back towards Africa.  Unlike China and America, it does not need oil and unlike Middle Eastern countries it does not need food.  As a result, Brazil is more focused on expanding opportunities for itself and its companies as opposed to extracting resources taking them back home.

So what exactly does it mean to expand opportunities?  What exactly does Brazil do in Africa?  First, it lends money.  The Brazil is lending $150 million to Kenya to build roads in Kenya’s capital.  Second, Brazil builds things.  In Mozambique, Brazil is building a plant that manufactures drugs that fight AIDS.  Third, it expands its diplomatic presence; Brazil has built 36 African embassies in the last 10 years.  Fourth, it makes connections.  Flights have begun from Brazil’s largest city Sao Paulo, to Ethiopia and Brazil has recently finished laying a fiber optic cable that connects Brazil to West Africa.

Bottom Line: Brazil is doing work.