Brazil Joins Lusophone Compact to Boost Private Sector Development in Africa

Brazil has officially become a member of the Lusophone Compact, an initiative aimed at accelerating private sector development in Portuguese-speaking countries in Africa, known as the PALOPs.

The memorandum of understanding was signed by Brazil’s Minister for Planning and Budget, Simone Tebet, and the president of the African Development Bank Group, Dr. Akinwumi Adesina, in Brasilia. The signing ceremony was attended by ambassadors from Portugal and Portuguese-speaking African countries.

The Lusophone Compact initiative, launched in December 2018, is a collaborative effort between the African Development Bank, the government of Portugal, and the six PALOPs.

During the signing ceremony, Minister Tebet emphasised the strong historical, cultural, and social ties between Brazil and the Portuguese-speaking African countries. She highlighted the need to strengthen economic ties through increased investments, trade, and cooperation.

Dr. Adesina praised Brazil for joining the Lusophone Compact, stating that Brazil’s membership will enhance South-South cooperation under the initiative. He emphasised Brazil’s leadership in various sectors, including agriculture, energy, health, and industrialisation, which will contribute significantly to the Compact’s objectives.

Brazil’s exports to the African continent totalled $12.7 billion in 2022, mainly covering agricultural produce and equipment, while imports amounted to $8.50 billion, of which most were minerals and industrial raw materials. The main destinations in 2022 for Brazilian exports were Egypt, Algeria, South Africa and Angola. Brazil’s stock of investments in Africa reached $1.9 billion in 2021, spanning the infrastructure, mining, oil and gas, and renewable energy sectors. Under the Lusophone Compact Framework, the Bank has since 2019 approved $166.4 million of investments to partially finance projects across the energy and transport sectors, as well as enterprise development initiatives.

The African Development Bank has been actively involved in financing projects in PALOP countries under the Lusophone Compact framework. Since 2019, the Bank has approved significant investments across sectors such as energy, transport, and enterprise development.

Dr. Adesina also expressed his admiration for Brazil’s commitment to Africa, citing Brazil’s engagement with the continent in various fields. He underscored the importance of leveraging Brazil’s expertise and resources to support private sector development in PALOP countries.

As part of Brazil’s accession to the Lusophone Compact, the country has contributed $1 million to the Compact’s Trust Fund. This fund will support technical assistance, advisory services, and capacity building for private sector entities in PALOP countries.

Dr. Adesina proposed further collaboration between Brazil and the African Development Bank to accelerate private sector development in PALOP countries. He suggested establishing a dedicated Brazil-backed guarantee to match Portugal’s guarantee of EUR 400 million, which would double the Compact’s guarantee to EUR 800 million.

In conclusion, Dr. Adesina welcomed Brazil to the Lusophone Compact and reiterated the African Development Bank’s commitment to working closely with Brazil, Portugal, and other members of the initiative to promote economic growth and development in PALOP countries.

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Source: African Development Bank