Brazil goes to Africa and a new trade route is being born

Port of Banjul, Gâmbia (AfDB)

Up to 2003, Brazil had 18 embassies and only one consulate on African territory. Ten years later, the government had expanded the number of diplomatic representations to over 19 embassies and opened a new consulate, with a total of 39 diplomatic representations on the continent. According to the Brazilian Trade and Investment Agency (Apex), in that same period, trade exchanges among Brazil and countries in Africa skyrocketed by 410%. From 2004 to 2014, Brazilian exportations to African countries increased by 131%, sugar, beef, poultry, and cereals were the most noteworthy. However, it is possible to make these results become even more impressive. In order to achieve this, it is necessary for the government and business enterprisers to map multiple existing possibilities.

One of the promising sectors would be supplying agricultural machinery to Africa, especially because Brazilian companies are granted a great deal of incentives for focusing their sales on the other side of the Atlantic Ocean. The “Mais Alimentos” (More Food) program was developed by the Agrarian Development Ministry making it feasible for the exportation of agricultural machinery to such countries as Zimbabwe, Mozambique, Ghana, and Senegal. “This market is still just beginning. There are some countries just starting to implement mechanized agriculture. Thus, it is very interesting to make our presence known there”, evaluates Pedro Estevão Bastos, president of the Abimaq Agricultural Machinery and Implement Sectorial Chamber (Brazilian Association of Machinery and Equipment).

The machinery and equipment sector is able to take advantage of this extremely favorable scenario, especially highlighted by its role in the agricultural field. This is responsible for over 50% of the total number of jobs and over 20% of the Gross Domestic Product (GDP), in most countries on the African continent, as this segment is one of the main growth impellers in the region. The FAO foresees an 80% increase in the food crop by 2,050. “Brazil has already taken an important step forward and we can achieve this in Africa. We are going to join forces and play an extremely important role in feeding the world”, reveals Luiz Cornacchioni, executive director of the Brazilian Agribusiness Association (ABAG). “Africa is not competing against us, nor are we competing against Africa. On the contrary, this is a win-win relationship, as the demand is so great”.

“Somethings are developing in Africa, but one thing is fundamental and that is providing legal safety”, points out the director of Abag. “In order to create a favorable environment, with standards, regulations, and laws for attracting investments. Africa is doing this. Some countries are development faster than others”.

“Brazilians are interested in increasing their relations with Eastern Africa. But the Brazilian enterpriser needs to change and see that many things can be done here.”, confirms Marcos Brandalize, Brazilian who has lived for two decades in Nairobi, Kenya, who is leading the BrazAfric group, representing Brazilian companies in the eastern part of the African continent. “The era for introducing products here has already been concluded here. Now, it is high time to produce manufactured products. I am preparing myself and trying to convince our partners to set up assembly units and afterwards manufacture everything here. That is the future”, he adds.

Positivo BGH plant in Kigali special economic zone, Rwanda (Positivo BGH)

And that is what PositivoBGH has been doing. This is a joint venture company, BHG from Argentina and Positivo from Brazil, the largest manufacturer of computers and leader in educational technologies in Brazil, and it has set up a plant in Kigali, Ruanda for making inroads in the continent. The company signed a five-year contract with the government of the Country to supply 150 thousand computers per year. The contract was agreed to in November 2014, resulting in the opening of a factory, in July 2015. This unit utilized US$ 2.5 million in investments and occupies a 7,500 square meter area and is capable of producing 60,000 items monthly. “We wish to be the Singapore in Africa”, jokes Miguel Stief, CEO of Positivo BGH. “Our strategy is to harness the knowhow from Positivo in education and afterwards offer a wide range of products to Ruanda and the neighboring countries”, he tells.

The company recently won 33% in a bidding process for the installation of smart classrooms in 20 thousand schools in Kenya. “It was a bidding process that involved twenty consortiums. We bid against all the market giants, such as Lenovo and HP”, explains Stief. According to him, the project is very different from what is being done in Ruanda, where the government only receives computers. “We have to deliver the entire framework, ranging from tablets, computers, projectors, and network hardware and even training teachers. This project is quite complex”. Even without going into detail, the executive shares that other bidding processes are already ongoing, in the fields of process automation. “We have also had conversations in Kenya to offer other types of products, such as smart phones, and televisions”, he celebrates. “We see Africa as an enormous market that is going to expand even more in the coming years. It is necessary to have courage, know the cultures well. But whoever arrives first, will get the head start”.

The protagonism of results

Itamaraty employs a total of 91 diplomats on permanent missions and 6 in transitory missions in Africa, according to the data from June 2016 from the Ministry of Foreign Affairs. Nowadays, the Brazilian cooperation benefits over 30 countries in Africa, with a budget around US$ 57 million dollars on projects. The Brazilian Cooperation Agency (ABC) coordinates around 150 initiatives. Although, some of them are still just on the drawing board, in such countries as Angola, Algeria, Benin, Cape Verde, Guinea Bissau, Mali, Mozambique, Sao Tome and Principe, Senegal, and Tanzania are the main benefactors. Right now, the Portuguese language countries reunite the greatest number of projects and budget when compared to the French and English speaking countries together.

The Brazilian role also promoted an increased interaction among countries in the Southern Atlantic region and Northern Africa that even resulted in a free trade agreement between Mercosul and Egypt. That expansion was also reinforced by the appearance of the BRICS countries — a political cooperative made up by Brazil, Russia, India, China, and South Africa.

Brazil has become a reference in social welfare programs and in technical cooperation projects. One of these projects is the “Cotton-4” that promotes Brazilian technical cooperation in the African cotton sector. Backed by the technical support from Embrapa, the project has achieved impressive results in the benefitted countries during its first phase (Benin, Burkina Faso, Chad, and Mali), occupying a strategic role in the political development and the reduction of poverty in those countries.


The program that employs family agricultural sources for school lunches — PAA Africa (Purchase from Africans for Africa) — that was “exported” to Ethiopia, Mozambique, Niger, Senegal, and Malawi, partnering with PMA (World Food Program), the FAO (the UN Organization for Foodstuff and Agriculture) and the DFID (Department for International Development from the United Kingdom).

Some other important initiatives were the opening of an Embrapa office in Ghana and the setting up of an antiretroviral medication factory in Mozambique. Another consequence from the Brazilian role was the nomination of Brazilians for important leadership positions, such as the director of FAO, headed up by José Graziano da Silva.