The Brazilian Development Bank (BNDES) is taking yet another important step forward in expanding its international presence. On this Friday, December 6, the Bank inaugurated its representative office on the African continent. The BNDES’ new office is located in Johannesburg, in South Africa.
The Bank plans to broaden its relations with regional and local institutions, as well as furthering its know-how concerning Africa’s business environment. Presence in Africa is expected to help boost business between Brazil and the continent, contributing to mutual economic development. The BNDES’ efforts also reaffirm the Brazilian government’s priority to relations with Africa. Last year, the Bank opened a department to deal specifically with affairs related to the African continent.
Present at the inauguration ceremony were the president of the BNDES, Mr. Luciano Coutinho, and the Bank’s managing director for affairs related to Africa, Latin America and the Caribbean, Mr. Luiz Eduardo Melin. The minister of Development, Industry and Foreign Trade, Mr. Fernando Pimentel, sent a video-taped message.
The ceremony started with a moment of silence in honour of South African leader Nelson Mandela, who passed away yesterday. Coutinho said the inauguration occurred “on a day of grief, but Mandela should be an inspiration for all the activity here”.
“This is an occasion when we combine our grief with a sense of future, a sense of mission and a component of hope in the future of our relationship and in the future of Africa”, the president of BNDES said.
The BNDES’ office is located in the continent’s main financial center, Johannesburg, South Africa, which, together with Brazil, Russia, India and China, forms the bloc of emerging economies, known as the Brics. Besides the office in Africa, the Bank also has a representative office in Montevideo and a subsidiary office in London.
Similar to the Bank’s other foreign offices, the structure is compact: there are three BNDES staff members and two local collaborators, headed by Paulo Roberto Araújo, an executive with a 20-year career and solid experience in the Bank´s International Division.
The office will provide information on financing modalities for exports of Brazilian goods and services, as well as support instruments to internationalize Brazilian companies seeking business opportunities in Africa (joint ventures, investment to set up new branches/affiliates to expand). It will also serve to facilitate and speed up contact between the Bank, companies and entities working in the region.
The Bank’s work, therefore, will not be of an operational nature. When technical guidance results in a possible operation for the BNDES’ support, all efforts aimed at classifying eligibility, analysis, approval, awarding and follow-up on projects will continue to be conducted at the Bank’s headquarters in Rio de Janeiro.
History – Since the last decade, the BNDES has offered support for export operations of Brazilian goods and services to Africa. Projects include efforts in the areas of power generation and transmission, highways, sanitation, housing and airport logistics, as well as exports of not only aircraft, but also machinery and equipment, including farming equipment.
Since 2007, the BNDES has disbursed US$ 2.9 billion to operations in Africa, in countries such as Angola, Mozambique, Ghana, South Africa and Equatorial Guinea. In these operations, the Bank only finances a percentage of investments related to exports of Brazilian goods and services.
Africa, over the last few years, has become one of the regions on the globe with the most active growth. Between 2003 and 2012, the continent’s GDP rose, on average, 5.1% per year, well above the world average, which reached 2.7% in the period, according to IBRD data. The recuperating economic situation has been accompanied by political stabilization and institutional improvements, which has only strengthened them.
At the same time, Brazil’s growing trade with Africa has been in step with the development of Africa’s international trade. Between 2000 and 2012, the flow of trade between the two regions expanded more than six-fold, increasing from US$ 4.9 billion to US$ 26.5 billion. The importance of Africa in the total of Brazil’s international trade also grew. In the 1990s, Africa’s share was close to 3%, but, more recently, this stake has risen to approximately 6%.
“We wish to support Brazilian businneses in expanding their activities in Africa, but we wish them to do so in a constructive way”, Coutinho outlined during his speech, mentioning the potential of associations between African entrepreneurs and Brazilian companies, through partnerships and also “transfer of technology and knowledge from Brazil to Africa in many fields”.
He stressed that the participation of Brazilian companies in large projects in Africa should take place “taking care of the environment, taking care of the social environment, being an example of how we can work with a human dimension to support the development of this large and dynamic continent”.
About the BNDES – The BNDES is the main financing agent for development in Brazil. Since its foundation, in 1952, the bank has played a fundamental role in stimulating the expansion of industry and infrastructure in the country. The Rio de Janeiro-based Bank offers several financial support mechanisms to Brazilian companies of all sizes as well as public administration entities, enabling investments in all economic sectors.