Both. The art clearly has African roots, but it grew and flourished in Brazil.

Capoeira evolved from a combination of various African traditions and rituals. The musical instruments originated in Africa, the musical rhythms are based on the ijexá rhythm of candomblé, and the pattern of call-and-response songs/chants is an African one. The movements came from African dances and martial arts such as n'golo, bassula, and batuque, among others.

However, the Brazilian influence on capoeira cannot be denied. Capoeira as we know it did not develop in other countries that also used African slave labor. The songs are sung in Portuguese. Mestre Bimba, a Brazilian of African descent, developed the style and teaching method known as capoeira regional. Finally, it was Brazilians who spread capoeira throughout the world.

Since capoeira would not exist without either Brazil or Africa, I believe the art is best described as "African-Brazilian."