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Brazil announce Africa debt cancellation

Some 12 African countries will benefit from a $900 million debt cancellation by Brazil as the world’s seventh largest economy renews its commitment to Africa for the next few decades.

The announcement was made on Sunday in the Ethiopian capital Addis Ababa where a Brazilian delegation was led by President Dilma Roussef to attend the 50 anniversary of the establishment of the Organization of African Unity which in recent years has been transformed into the African Union.

Almost all the aid will be cancelled. Maintaining a special relationship with Africa is strategic for Brazil’s foreign policy” Thomas Traumann, Ms Rousseff’s spokesman told journalists at a news conference on the sidelines of the AU golden jubilee in Addis Ababa on Sunday.

According to him, the bulk of the debt in question had been accumulated more than forty years ago and was subjected to some earlier renegotiations.

He also indicated that the debt restructuring exercise regarding Africa’s debt would favour the introduction of better interest rates and longer repayment terms.

Congo-Brazzaville are Brazil’s biggest debtors owing the Latin American country $352m, followed by Tanzania ($237m) and Zambia ($113.4m).

The three countries were named among the 12 African countries with strong economic links to Brazil to benefit from the debt cancellation and restructuring.

The other countries to benefit immediately from the initiative are Ghana, Guinea Bissau, Gabon, Ivory Coast, Senegal, Sudan, Mauritania, Sao Tome and Principe and the Democratic Republic of Congo.

In recent years Brazil has been expanding its economic involvement in African countries as part of its South-South cooperation with the continent with trade between the two blocs picking up from $5bn in 2000 to $26.5bn twelve years later.

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