Brazil has forgiven Tanzania its $203m debt dating from a loan made 18 years ago to build a highway between the city of Morogoro and the capital, Dodoma.
The boon to the fast-growing African country has been under discussion for a number of years and, paradoxically, is being billed as the key for unlocking more Brazilian investment in Tanzania.
Tanzania’s ambassador to Brazil and an official from the Brazilian National Treasury signed the agreement on Sunday, 17 September, reports newspaper The Citizen.
The 1979 loan paid for the construction of the roughly 260km road between the two cities.
Tanzania’s ambassador Emmanuel Nchimbi thanked the Brazilian government, saying the move would help President John Magufuli’s efforts to revamp the economy.
The move will also allow more Brazilian cash to flow. Guilheme Laux, Undersecretary of Credit and Guarantee from Brazil’s Ministry of Finance said the decision would enable Brazilian companies to borrow money from Brazilian banks for development projects in Tanzania, The Citizen said.
Laux also said the two governments can now discuss new development projects.
Before its recent political woes and the crash of the oil price, Brazil said in 2013 that it would cancel or restructure almost $900m worth of debt among 12 African countries, including Tanzania, reported newspaper The Daily News.
Image: Tanzania’s Ambassador to Brazil Dr Emmanuel Nchimbi, right and Brazilian National Treasury official Dr Sonia Portella Nunes, left shake hands on the debt forgiveness agreement on 17 September 2017 (Dr Emmanuel Nchimbi/Facebook)