Brazil offers Africa US$900m in debt relief

PUBLISHED : Monday, 27 May, 2013, 12:00am
UPDATED : Monday, 27 May, 2013, 5:59am

Brazil will cancel or restructure almost US$900 million of debt owed by African countries, a Brazilian official says, as part of a plan to increase future funding to the continent.

Latin America's economic powerhouse is increasingly expanding its economic ties with Africa, a sign of how crises in the rich world are pushing faster-growing emerging economies to trade and invest among themselves, economists say.

Brazilian officials said President Dilma Rousseff, visiting Ethiopian capital Addis Ababa to mark the African Union's 50th anniversary, was set to announce a new development agency offering assistance to African countries with the debt cancellation.

"Almost all [aid] is cancellation," said Thomas Traumann, a spokesman for Rousseff.

Under its own law, Brazil cannot offer new loans or long-term financial assistance to countries with outstanding debt.

Traumann said most of Brazil's future assistance would target infrastructure, agricultural and social programmes.

Among the 12 countries set to benefit are new gas exploration hotspot Tanzania, which owes Brazil US$237 million, the oil-producing Republic of Congo and copper-rich Zambia.