Dar es Salaam — Tanzania and Brazil are in negotiations to see how they can finish off the loan extended to Tanzania in 1979.

The $49million (Tsh53.9billion) loan was extended to Tanzania to finance the construction of the Morogoro-Dodoma highway.

The two countries also agreed to begin negotiations to settle bilateral debt agreement as soon as possible.

Tanzania's current outstanding indebtedness to Brazil now stands at $240million (262billion).

The debt arises from a 1979 loan agreement amounting to $49million (53.9billion) to finance construction of the Morogoro-Dodoma highway.

The permanent secretary in the ministry of agriculture, food security and cooperatives Mr Peniel Lyimo, said Tanzanian experts have been invited to Brazil for the negotiations on how the two countries can quickly wrap up the debt issue.

The agreement was reached last week at a two-day meeting of the first session of the Joint Commission of Tanzania and Brazil, which identified and discussed further potential areas of co-operation between the two countries.

Mr Lyimo said other areas of co-operation include agriculture and livestock, energy, finance, sports and culture, education, health, immigration and foreign affairs.

"Some areas like agriculture will be acted upon pretty soon so as to capture the current opportunity opened by the rising food prices, but other areas will require more time," Lyimo said.

Ambassador Roberto Jaguaribe, the Vice-Foreign Minister for Africa, Asia, Middle East and the Pacific, who was the head of the Brazilian delegation, said that Brazil was committed in transforming what was signed.

Brazil was assisting Tanzania in projects such as sugarcane production, dairy project in Kibaha, elephant grass project in Kilosa and the construction of the Morogoro-Dodoma road.

Since Brazil reopened its embassy in Tanzania in 2005, both countries have shown interest in boosting their business and economic ties, particularly in the area of agricultural technologies.