LatinFinance - March/April 2013 - 33

South-South report: Africa

often than not, if you travel from one
sharply in 2009, as the global financial
Although trade and investment links
African city to another, you need to
crisis hit commodity prices.
between Latin America and Africa have
have a connection in Europe,” says
Last year’s performance was also
grown over the last decade, they remain
Machado. “This shows that the African
mixed. Brazilian exports were stable –
limited. Latin America’s trade with other
physical integration from this transport
partly buoyed by a strong increase in
emerging markets jumped from 25.4% in
perspective is still largely insufficient.”
2001 to 43.3% in 2011. But Africa’s share bilateral trade with Libya – but imports
Embraer has sold over 100 regional
from Africa fell by 5% compared to 2011.
of that has stayed small: Latin American
jets in the continent. These have gone
exports to Africa, as a share of the region’s
Bread and butter
mostly to southern Africa, including
total exports, increased nine basis points
Agriculture and infrastructure still
Angola, but also to Nigeria, Ghana in
to 2.1% in the decade to 2011, according
represent the bulk of Latin America’s
West Africa and Kenya on the East Coast,
to HSBC (see table).
presence in Africa. Brazil has
Libya and Egypt. Its customer
become a net aid donor to
base is rapidly expanding. Five
Africa and has been promoting
years ago, Embraer only had
Africa trade grows – but slowly
Share in Latin American exports and imports (%)
agriculture projects in
two clients in Africa. It now has
seven countries, including
16. Sales of executive jets to
Exports
Imports
Mozambique where it has
wealthy African businessmen
2001
2011
2001
2011
been operating in partnership
have also soared.
World
100
100
100
100
with the Japan International
Some BNDES officials
US
57.8
39.6
48.4
30.6
Cooperation Agency (JICA).
argue that aviation in may be
Latin American firms may
as important a strategic sector
Europe
11.9
12.7
15.7
14.2
be trailing Chinese ones in
in Africa as mobile telephony
UK
1.8
1.1
1.3
1.0
Africa. And some may have
a decade ago. Embraer is also
Eurozone
9.5
10.7
13.0
11.9
already run into trouble, such
active in defense. Last year it
as Vale, which recently froze a
signed around $180 million in
Asia
5.6
18.2
10.7
26.5
major iron ore mining project in
contracts to supply countries
China
1.7
9.9
2.8
15.1
Guinea.
including Angola, Burkina Faso
In terms of infrastructure,
India
0.4
1.5
0.4
1.3
and Mauritania with vigilance
however, Brazilian firms occupy
and counter insurgence aircraft.
Africa
1.2
2.1
1.6
2.2
a dominant position in some
LatAm
11.9
13.4
12.7
14.7
African countries. Odebrecht,
Not so fast
the engineering group, is the
Yet in general, attracting the
Rest of the World
11.7
14.0
10.9
11.8
largest private employer in
needed investment has proved
Source: HSBC, UNCTAD stat
Angola, with 17,000 staff. It
difficult.
has entered a joint venture
GV Agro, part of Brazil’s
with the Angolan government in the
Getulio Vargas Foundation, partnered
Meanwhile, China’s trade with Africa
diamond company Empresa Nacional
with Deutsche Bank’s private equity arm
has rocketed. Chinese exports to Africa
DWS to set up a $1 billion fund to invest
increased from 1.7% to 9.9% of its overall de Diamantes de Angola (Endiama) and
also runs supermarkets. The company
in food and biofuels projects in Africa,
foreign sales over the decade to 2011.
benefiting from the Brazilian expertise.
And India’s trade with Africa has tripled – is also one of the largest private sector
employers in Mozambique.
Nevertheless, after several delays, the
although at 1.5% of India’s exports, their
“Mozambique is very attractive in gas,
project was put on hold and the fund
value is still small in absolute terms.
was passed on to BTG Pactual last year,
Figures from Brazil are higher, yet still there is a lot of potential for extractive
industries,” says Ncube.
says Cleber Guarany, who coordinates
modest. There has been steep progress
The prospect of vast shale gas
development projects for GV Agro.
over the past 10 years, but the increase
reserves in southern Africa could also
BTG Pactual, which also announced
has not been constant. Trade between
prove transformative, Ncube adds. “I
plans to set up a $2 billion fund to
Brazil and Africa jumped from $4 billion
see a deepening of [Latin American]
invest in infrastructure in Africa, has
in 2000 to $27.7 billion in 2011 and
financial relations in Africa,” he says.
repeatedly declined to comment on the
amounted to 5.7% of Brazil’s overall
issue.
foreign trade, a record high. But it also fell “The trend is on the up.” LF

March/April 2013

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LatinFinance - March/April 2013

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