BERRI Development has agreed to buy its Africa-facing business, Angolan Backend Development Project (BBD), for $6.5bn, a deal that will see it take over from private investors and will also see Angolan firms compete with local firms in the US.
The deal is expected to close on 1 February 2019, with the US government making the final decision on the final terms of the transaction.
Angola is Africa’s third largest economy and a major source of foreign direct investment.
BBD was founded in 1994 by businessman and entrepreneur Jose Miguel Cardona.
The deal follows other big-name deals by Angolan and US companies in recent years, including a $1.8bn deal to buy the entire power and communications infrastructure of Angola in 2013.
BBD was established in the early 1990s by a group of businessmen including former US Vice President Mike Pence, former US President George W Bush and former US Ambassador to Angola, Jimmie Johnson.
In 2015, Angolans President Jose Eduardo dos Santos signed a new deal with the United States, giving the company access to the entire supply chain and a new headquarters in New York, in exchange for US aid.
As a result of the new deal, Angola now has about 1.2m square kilometres of infrastructure.
Angolans have long been keen to develop their own infrastructure, particularly at the cost of foreign aid.
The Angolan government is currently building the first phase of the $2bn Cebu-Manil International Airport, a project that is due to open in 2018.
According to the US Embassy in Bangui, BBD has already provided more than 1,000,000 kilowatt hours (kWh) of electricity to the airport’s operations.
“In 2018, BCD was one of the most innovative and efficient providers of electricity in the country,” the US embassy said in a statement.
“The project is expected for completion in 2019 and will create about 2,000 jobs and increase our economic growth.
Angola, a country of over 100 million people, has become a leader in the field of power generation and transmission as well as in the construction of energy infrastructure,” the statement added.
Angolians currently have access to 1,100 megawatts of electricity, according to the embassy, which is higher than the world average.
More: BIDEN INDEPENDENCE, BIDEN, BILL DEAL ON BIDENS NEW MISSION TO BRING DOWN THE BAN OF BANANA The BBD deal comes as the United Nations has launched an investigation into the country’s banana plantations and a crackdown on dissent has intensified in the last few months.
An investigation by the UN Food and Agriculture Organisation (FAO) has found that between 2009 and 2015, the country had a banana import ban that resulted in a loss of $14m in revenue to the state of Angolan.
The banana import restriction, known as the “banana coup”, was imposed in 2014 and resulted in the banning of bananas from Angolan’s markets and forcing farmers to plant more than 30,000 tonnes of the plant over the next five years.
Critics have claimed the ban has had a negative impact on the country and has resulted in many local people becoming unemployed.
However, the FAO’s investigation found that the ban was not linked to any specific crops, but was rather a measure that impacted local farmers in a way that was not consistent with other food subsidies in the region.
A report published in February by the FAOs International Trade Centre for Agriculture and Food Security concluded that the export ban did not affect the country in any way, and was linked to other factors, such as poor yields of bananas and the use of fertilisers in agriculture.
‘THE FUTURE IS OUR HOUSE’ The FAO said the ban on the import of bananas was implemented “in the face of mounting evidence that the import ban was causing significant harm to the livelihoods of Angolians, and had been causing significant economic hardship to the agricultural sector.”
The ban also resulted in an increase in the number of small farmers in Angolan, who were not able to earn enough to buy bananas, according the FA.
Following the FAOA’s report, the Angolan Ministry of Agriculture and Rural Development issued an order banning the import and sale of bananas in the Angolian market for five years from January 1.
Read more about the banana ban: “Angolan farmers are being left with no choice but to buy more expensive bananas to feed their families,” the FAOS report said.
“The import ban is causing economic hardship and the government is not doing enough to help the farmers, who are struggling to pay their salaries.”
‘IT WILL BE AN ORGANIC FAILURE’ Budyan Bajasamy