Sao Paolo to write off £600m of African debt

President Dilma Rousseff is set to announce a new development agency that will offer assistance to African countries (AFP/Getty images)

Brazil will cancel or restructure almost $900m (£595m) of debt owed by African countries as part of a plan to increase its future funding to the continent.

Latin America’s economic powerhouse is increasingly expanding its economic ties with Africa, a sign of how financial crises in the developed world are pushing faster-growing emerging economies to trade and invest among themselves, economists say.

President Dilma Rousseff is also set to announce a new development agency that will offer assistance to African countries. “Almost all (aid) is cancellation,” Thomas Traumann, spokesman of Brazil’s presidency, said. Mr Traumann added most of Brazil’s future assistance would target infrastructure, agricultural and social programmes.

Among the 12 countries set to benefit are the new gas exploration hotspot Tanzania, which owes Brazil $237m, along with oil-producing Republic of Congo. Most of the debt was accumulated in the 1970s and had been renegotiated previously.

Reuters