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 By Frank Kimboy
Visiting Brazilian President Luiz Inacio Lula Da Silva yesterday offered to write off a more than $240 million (about Sh336 billion) debt Tanzania owes his country. Speaking in Dar es Salaam, the Brazilian leader said his country was ready to discuss the modalities of relieving Tanzania of the burden.
Mr Da Silva, who is on his first official trip to the country, told his host, President Jakaya Kikwete, at Ikulu, during their talks that there was great possibility that Brazil would cancel the debt, considering the growing close relations between the two countries.
Talks on the issue, involving teams to be headed by Finance ministers of the two countries, are expected to start soon.
Mr Da Silva said the debt waiver to Tanzania was part of Brazil’s deliberate moves to ensure that the least developed and developing countries team up to liberate themselves.
He said that for many years, Brazil had been extending loans to poor countries but it had now started to review the debts to help ease the problems of some of the poor countries.
“If we can lend money to the IMF to support various economic activities in Africa and Asia, why can’t we review our debt to Tanzania and find out ways to cancel it?” he posed.
President Kikwete thanking his visitor for the pledge, said the $240 million was accumulated debt, interest and penalties imposed after the country failed to pay the $49 million it borrowed in 1980, to construct the Morogoro-Dodoma highway.
He said that if Brazil would cancel the debt, it would be a big relief to the country, as it had not been able to service the loan for some time.
“I must admit that we, as a country, due to financial difficulties and various economic development setbacks, have failed to repay the loan… and I express my sincere gratitude to His Excellency, Da Silva and Brazil, at large, for this gesture,” President Kikwete said.
President Da Silva made his announcement during the second of his two-day official visit.
For his part, President Kikwete said he was disappointed about the trade imbalance between the two countries. Available statistics show that Tanzania exports goods worth only $30,000 (about Sh42 million) annually to Brazil, while it imports from the South American country goods worth $12.1 million (about Sh16.9 billion).
However, he was optimistic that President Da Silva’s visit and Brazil’s participation in the Dar es Salaam International Trade Fair (DITF) were good signals that the situation would change soon.
“The unfair trade balance between the two countries is due to lack of awareness by the traders on what each of our countries has to offer to another but I am positive things will change soon,” Mr Kikwete said.
The two leaders also witnessed the signing of three Memorandums of Understanding (MoU) between the two countries. The deals signed include an agreement to tackle climate change, the training of diplomats in Brazil, and an exchange of students in the field of ethanol fuel between Petroleum Brasiliero of Brazil and Tanzania Petroleum Development Company (TPDC).
Before meeting President Kikwete, Mr Da Silva had officiated at the closing ceremony of this year’s DITF, at the Mwalimu Nyerere Grounds on Kilwa Road in Dar es Salaam.
Closing the 34th DITF, President Da Silva presented prizes to the National Social Security Fund (NSSF), the University of Dar es Salaam and the Small Industries Development Organisation (Sido) for emerging first, second and third among the exhibitors.
Earlier, the visiting Brazilian leader had met with members of the business communities from both countries.
Speaking during the meeting, Mr Da Silva urged Africa to invest heavily in the production of biofuels. He said this would see Africa eradicate poverty by having an alternative source of energy source and reducing the heavy dependence on hydro-electric power.
He said should Africa invest in massive biofuel production to attract capital from many of the developed countries. He said the product could also earn Africa a lot of revenue, as many countries were looking for alternative energy sources.
He said some investors had been reluctant to put their resources in Africa because of lack of a reliable source of energy.
He praised Tanzania for formulating good environmental policies, which were a prerequisite for investment in the production of biofuels.
Mr Da Silva said his visit to Tanzania, was his 27th to an African country since he became president. It was aimed at opening a new era for his country as well as for Africa from which the both parties could mutually benefit due to improved economic relations.
He said since Brazil was advanced in technology on tropical agriculture, and he would influence its transfer to Africa to enable the continent address food security challenges.
Brazil’s National Development Bank, he said, was in talks with the Africa Development Bank (AfDB) to earmark several projects in Africa, which could be sponsored by Brazil.
Mr Da Silva advised Tanzania to build a self-sufficient economy that would ensure that the country would not be adversely affected by the global economic crisis, as happened last year.
Brazil, Russia, India and China, the so-called BRIC group of emerging powers, have gained clout over the past decade as their economies grew faster than those of the developed countries. Together they accounted for about 22 per cent of the world economy in 2008, up from 16 per cent a decade earlier, based on the widely followed measure of purchasing power parity.
Real economic growth from 1999 through 2008 averaged 9.75 per cent in China, seven per cent in both India and Russia, and 3.3 per cent in Brazil.
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