Social mobility in Africa attracts Brazilian exporters

São Paulo – The government and Brazilian businesses believe that the recent model of mass consumption, social mobility and economic inclusion of the country will be reproduced in Afirca in the next decade and hope to increase their investments and exports to the continent.

São Paulo - O governo e os empresários brasileiros acreditam que o recente modelo de consumo em massa, ascensão social e inclusão econômica do país será reproduzido na África na próxima década e esperam aumentar seus investimentos e exportações para o continente.

This article was translated from Portuguese. Click here to read the original from Exame.

"Africa is the new world frontier in development," declared Carlos Abijaodi, director of development of the National Confederation of Industry (CNI), this Monday, who asked that the government prepare a long-term strategy to increase exports to African countries.

During a seminar on business between Brazil and Africa organized by the CNI in São Paulo, various promising scenarios were outlined on the opportunities of business in the continent.

"Africa is living in a second wave of consumption. Youth are migrating from the countryside to the cities, an urban tipping point. We see that this can occur the same as in Brazil, 10 or 15 years ago, with social mobility," evaluated, in turn, Ana Paula Repezza, manager of the Brazilian Agency for the Promotion of Exports and Investments (Apex-Brasil).

The commerce between Brazil and Africa increased more than 400% in the last decade, but the average growth of sales from Brazil to Africa remained below its main competitors, according to the report by the Ministry of Development, Industry and Foreign Trade.

According to the data of CNI, between 2010 and 2013 the growth of Brazilian exports to 54 African countries was 6%, against 9.16% for the European Union, 11.85% for Mexico, 13.41% for China and 22.28% for India.

"Brazil lacks a long-term strategy to compete with other countries in Africa. But it is clear that Africa wants a strategy with Brazil, with greater potential of a repetition in African countries that which already has proven successful in Brazil," weighed Abijaodi.

The director of the CNI thus referred to the policy of cooperation initiated in 2003, in the Luiz Inácio Lula da Silva administration, in terms of agriculture and industrial training schools for African workers by Brazilian contractors.

"It is a non-colonialist policy," agreed the lawyers of CNI and Apex-Brasil.

Success cases like the mining company Vale, whose main comprehensive plan is a coal mine in Mozambique, or the bus manufacturer Marcopolo, installed in Egypt, were cited in the seminar.

For the South African Michael Lalor, African director for the consulting firm Ernst&Young, until 2007, 25% of the main foreign investments in the continent were focused on raw materials.

"The focus in 2013 is technology, financial services and consumption, with the majority of youth migrating from the countryside to the cities," commented Lalor.

Furthermore, the South-African was timely to indicate the capital of Angola, Luanda, as a large business center of Sub-Saharan Africa. "It seems to be that it was Dubai for several decades," he commented.

The specialists believe that the growth in the African continent in the next six years will be approximately 10%.

A professor of the University of Brasilia (UnB), Jorge Arbache, an African specialist, affirmed that the biggest wager of businesses is training, but he also wants to adapt the mentality to the "local business model."

Beyond that, he offered data to incentivize the investors in the food industry: 60% of the non-cultivated land in the world is found in Africa.

"Is it risky to invest in Africa? Yes, but it is more risky to not be present there," he offered.

Another debate was opened by Pedro da Motta Veiga, from the Center for Integrative and Development Studies (Cindes), who pointed out that Brazil has an "unequal" presence compared to China, due to the ample funding that the Chinese dedicate to business.

In this sense, Veiga wondered whether it would be possible for Brazil to utilize a funding strategy for its multinational businesses in Africa through the recently-created BRICS New Development Bank.

Article Translated by Erica Kliment, Staff Intern with the Brazil Institute at the Wilson Center.

Photo Credit: Mohamed Somji via Flickr - Container Patchwork.