27 Mar IDC and Brazil enhance trade ties
Tangible benefits are expected from South Africa’s Brics membership. The IDC has made the most of the summit to sign agreements with its counterparts to enable economic growth.
Business ties between South Africa and Brazil will be strengthened following a co-operation agreement between the Industrial Development Corporation and the Brazilian Development Bank.
The IDC, a national development finance institution set up to promote economic growth and industrial expansion, and the Brazilian Development Bank, the Banco Nacional de Desenvolvimento Economico e Social-BNDES (BNDES), have signed a memorandum of understanding on the exchange of technical information about their products and financial policies.
The agreement was signed at the Durban International Convention Centre on 26 March during the side events of the fifth Brics (Brazil, Russia, India, China and South Africa) summit.
On the same day, the IDC also signed a memorandum of understanding with Russia for the two countries to co-operate in the field of small and medium enterprises (SMEs).
Under their agreement, the IDC and BNDES will work together over the next two years.
“We have agreed to establish and develop comprehensive, long-term co-operation, focusing on specific sectors, namely: automotive and components, including alternative-fuelled vehicle; aeronautics and components; energy generation, particularly the use of renewable or cleaner energy sources and cogeneration; food processing and other agro industries; pharmaceuticals; and mineral resource beneficiation,” said Geoffrey Qhena, the IDC’s chief executive.
Both the IDC and BNDES have identified areas that offer potential synergy and the possibility for co-operation. These include:
- Exchanging information on projects of potential interest to both parties, particularly small and medium enterprises;
- Assisting each other in areas of common co-operation interests;
- Frequent consultations with a view to finding better ways to assist their customers in obtaining financing to support their export of capital goods and services; and
- Co-operation in areas of job training, delegation visits and business symposiums.
The exchange of information between the IDC and BNDES will be enhanced through establishing direct contacts between the two parties, with regular meetings and other activities.
It is envisaged that in the long run, this co-operation will boost trade and economic ties between the two countries.
South African Minister of Economic Development Ebrahim Patel welcomed the agreements, saying they put concrete detail to the commitment to increased investment by Brics countries in each other’s economies.
“We are expanding our support to small businesses and the agreements with state financial institutions from Brazil and Russia will allow us to learn from each other.
I am pleased that the agreement with Brazil also provides for potential co-funding in key industrial areas. The Brics membership is now showing its potential benefits to the local economy,” said Patel.
BNDES is the main financing agent for development in Brazil. The bank provides support to programmes, projects and services that seek to promote the economic and social growth of the South American country.
Since its founding in 1952, BNDES has succeeded in stimulating the expansion of industries and infrastructure. It has also expanded its operations to include support for exports, technological innovation, sustainable socio-environmental development and the modernisation of public administration.
BNDES offers several financial support mechanisms to Brazilian companies of all sizes, as well as public administration entities, enabling investments in all economic sectors.