This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 9/5/2019

Overview

Subsistence agriculture provides the main livelihood for most of Angola’s population, but more than half of the country's food is still imported.  Angola holds tremendous agriculture potential with fertile soils, abundant water, and a favorable climate.  The Ministry of Agriculture estimates that Angola has almost 58 million hectares available for agricultural development, including 35 million hectares of arable land.  Of the arable land,  approximately 15 percent is currently cultivated, and 20 percent is suitable for irrigation.  After almost 27 years of civil war, aggressive international landmine clearing efforts have opened up extensive areas of land for agricultural development.  Livestock also holds strong potential in Angola, with a vast natural habitat for grazing and water resources throughout the country. 

During the colonial era, which ended in 1975, Angola was a major producer and exporter of cotton, coffee, corn, banana, tobacco, sugar cane, and sisal.   Currently, Angola’s main agricultural crops include cassava, corn, beans, potatoes, sweet potatoes, soy, bananas, coffee, rice, vegetables and fruits.  Domestic agricultural production capacity does not meet local demand.  The most fertile regions are in the highlands and valleys.  The rainy season is from October to May, which is considered the prime season for vegetable cultivation.  Tomatoes are grown during the dry season (June to September).  Greenhouses and irrigation expand the growing seasons, but these technologies are not widely used in Angola. 

Poultry production has increased slightly over the last 3 years but was affected by a an insufficient supply of feed and chemicals as well as  long periods of drought in some Angolan provinces.  Most chicken products in the market are currently imported to meet demand.  Angola’s livestock farming is located primarily in the southern part of the country and is based on natural pasture grazing.  Beef is the second largest agricultural product after cassava.  Other livestock, such as goats, pigs and chicken are raised mainly by small-scale farmers as subsistence food sources.  Since last year, the Government of Angola has been conducting a pilot livestock census with technical support  from the Food and Agriculture Organization of the United Nations (UNFAO) and with World bank funding.  The project is expected to be concluded in late 2019.  According to the the Cooperative of Cattle Producers of Southern Angola (CGSA), an industry association based in Lubango, Huila Province, cattle population is approximately 3.5 million heads nationwide.

A featured element of the Angolan Government’s National Development Plan for 2018-2022 is agricultural development to diversify the economy and to build domestic food production capacity that will decrease the country’s dependence on imported food.  To support this development, the Angolan government issued the Presidential Decree PAPE (Action Plan for Employability Promotion).  The program is funded by the Angolan government’s annual budget and oil fund and designed to increase local production and create jobs.

The Angolan government has established a number of publically announced target areas for agricultural production development including:
•              A comprehensive program to stimulate beef production and offset some of the 100,000 tons of beef imported annually into Angola.  Areas of focus include improving veterinary health, increasing herd production, strengthening slaughterhouse regulations, and building infrastructure capacity through government projects and credit to private entities. 

•              A plan to increase corn production capacity to meet domestic demand (human and animal feed) by 2020 through a range of public and private initiatives.  Current demand is for 4,500 tons of corn, but local production is only 1,800 tons.  Corn imports primarily come from Brazil, South Africa, and Turkey.

•              Wheat milling plants already operating in Angola include the Grandes Moagens de Angola project that has the capacity to produce 1,200 tons of wheat flour per day.  The owners of the new GMA mill in Luanda started building an identical wheat mill in the port of Lobito, on Angola’s southern coast.  Kikolo wheat mill on the outskirts of Luanda, is operating with a capacity to produce 1000 tons of wheat flour per day.  This increased capacity in wheat milling offers new opportunities for U.S. exporters of milling equipment and services.

Angola’s agricultural industry consists of both private and public companies.  Private sector agriculture is expanding with several large agro-industry growers, mostly involving Portuguese, Brazilian, and Israeli investors either independently or through joint ventures with the Angolan government.   Chinese participation in Angola’s agriculture is growing, prompted by Chinese government financing, with a 500 hectares rice production project in the southern province of Cuando Cubango, which was expected to expand to 1000 hectares in 2018.  

The economic downturn in Angola since 2015 has negatively impacted the Angolan government budget, including the government’s stated support of economic diversification efforts, such as agricultural production.  From 2013 to 2018 the national government budget allocation to agriculture was cut by over one-half.  However, the percentage of the budget committed to agriculture increased from 0.4 percent in 2018 to 0.84 percent in 2019.  This limited budget commitment falls far short of the Maputo Declaration, an agreement where all African countries agree to allocate at least 10 percent of their annual buget to revitalize the agricultural sector.  Among other areas, the lack of foreign exchange for imports has directly impacted Angolan government programs to provide subsistence farmers with seeds, fertilizers, and other agricultural inputs.  

The National Development Program and the 2019 national budget provide for specific agricultural programs, including: Agricultural Production Development Program (USD 192 million), Animal Production Program (USD 37.3 million), and PRODESI -Production, Export Promotion and Import Substitution Program (USD 89 million).  These programs are expected to support an estimated annual average growth rate of 8.9 percent in the agricultural sector for 2019, compared to  an approximate 3.1 percent in  2018.

The lack of commercial credit in the market and severe shortfalls in foreign exchange have also made it extremely difficult for companies to import needed agricultural equipment and inputs, creating significant obstacles to private sector agriculture development.  Strong pent-up demand exists for these important imports as companies try to establish and expand their agricultural production capacity.

Angolan government credit programs for industry and agriculture exist, but are underfunded and underutilized.  For example, “Angola Invest,” a government–guaranteed and subsidized line of credit program, provides up to USD 5 million through local banks for companies with 75 percent minimum of Angolan financial capital.  However, to date very few loans have been approved through the program, and commercial banks have complained about the lack of quality projects.  While the government’s development bank (Banco de Desenvolvimento Angolano) focuses on larger (over USD 5 million) long-term loans to private companies investing in productive sectors such as agriculture, limited government budget allocations have restricted the program.  Furthermore, clear land title for purposes of loan collateral is reportedly a challenge for some companies and individuals in accessing financing for agricultural activities.  

However, the Angolan government has engaged with multilateral development banks to provide loans to the private sector for the productive sector that includes agriculture, livestock, fisheries and agro-processing.

During periods of more generous budgets, the Angolan government directly supported the establishment of numerous large agricultural projects and companies.  Some of these include:

•              Gesterra S.A. (Arable Land Management) – An Angolan government company with 18 projects in 8 provinces throughout the country and investments of USD 800 million for cultivation of thousands of hectares of crops including rice, maize, soy, and beans, as well as livestock, poultry and swine.  The projects, developed in partnership with private entities, are designed to reach profitability within 8 to 9 years.  Through  a presidential decree Gesterra took over four agriculture project from the sovereign wealth fund in Cuando Cubango,  Moxico, Uige and Zaire provinces  to produce and process soy and corn.

•              SODECAP (Capanda Agro-industrial Development Park) - An Angolan state-owned company responsible for the development of the Capanda Agro-industrial region covering 411,000 hectares in Malange province.  SODECAP has invested in the operations of Pedras Negras farm (cereals), Biocom farm (corn, sugar cane, and ethanol), and Pungo Andongo Farm (corn) as well as in smaller projects involving 186 villages (agricultural produce, sugar cane, wood, livestock, and eggs).

•              SODEMAT S.A. (Matala Regional Development Company) - An Angolan state-owned company in Huila province is developing almost 7,000 hectares of land by providing around 500 small scale farmers with up to 25 hectares each, technical support, inputs and equipment (tractors and irrigation), all financed by the government development bank.

•              Aldeia Nova, an Israeli Vital Capital Fund public-private partnership with the Angolan government, consists of large scale agro-communal centers that support communities of farmers with technical support and equipment for the production, processing and distribution of products ranging from poultry and cattle to fruit, and vegetables. 

•              Quiminha Project (PIDARQ) – PIDARQ is an Angolan government Integrated Agricultural and Rural Development investment project, valued at $200 million, and developed by the Israeli company Tahal Group.  The 5,000 hectare project involves intensive irrigation and will include 300 family farmers with small plots as well as industrial scale private farms.  The project plans for an eventual production of 52,000 tons of agricultural produce per year.
 
Ongoing multilateral development bank projects include:
•              Currently under development with the Angolan Government is a major World Bank “Commercial Agriculture Development Project” estimated at USD 230 million in 2018.  The project is expected to continue until May 2024.  The proposed project development objectives are to promote commercial agriculture development and specifically to increase production and employment within selected value chains in targeted areas in Angola.  The project is divided into 3 components: agribusiness Development (USD 190 million); support to develop an enabling environment for commercial agriculture (USD 25 million); and project management, coordination and public-private dialogue (USD 15 million).  Texas A&M University’s Borlaug Institute conducted an agricultural assessment in early 2016 to assess and provide recommendations for advancing Angola’s capacities in the areas of poultry, livestock, coffee, grain crops, and value chain development to support this project. 

•              World Bank “Smallholder Agricultural Development and Commercialization” Project.  A second project loan was signed in July 2016 for USD 70 million to help increase smallholder agriculture productivity, production, and marketing for selected crops in the project areas.
 
•              The African Development Bank (AfDB) agricultural-related work in Angola is focused on developing small farmer projects and linkages to agricultural value chains and commercialization.  Active AfDB agricultural projects include:  1) a study of private sector agriculture capacity in Cabinda province; 2) technical support to advance infrastructure projects along the “Lobito corridor” in order to connect the markets of the Democratic Republic of the Congo, Zambia, and Angola; and, 3) agricultural development in southern Angola related to the impact of climate change on this naturally dry area.

Bilateral donors and business interests have focused more attention on Angolan agriculture.  For example a USD 73 million Spanish line of credit was announced in early 2017 to support Spanish investment in Angola, including agriculture projects.  Similarly, in 2018, France announced a USD 545 million loan for the water, energy, and agricultural sectors.

 

Ag equipment, inputs and vet supplies

2016
 

2017
 

2018
 

2019
Estimated
 
Total Local Production0000
Total Exports0000
Total Imports37385055
Imports from the US1.51.68.38.7
Total Market Size37385055
Exchange Rates163166245340
(total market size = (total local production + imports) - exports)
Units: $ millions
Source: Source: PND, Global Trade Atlas and OANDA

Leading Sub-Sectors

Equipment for seeding, planting and harvesting grains and horticulture crops:
•              Livestock production equipment and technologies
•              Cold chain solutions (refrigeration/warehousing)
•              Food processing equipment
•              Seed varieties
•              Fertilizers/compost
•              Irrigation systems (pumps, pipes, etc.)
•              Veterinary supplies
•              Training and management services and technology

Opportunities

Main agricultural equipment suppliers to Angola are Portuguese, Brazilian and Indian. A number of U.S. agricultural equipment and technology companies are active in Angola through distribution partners, including John Deere, Caterpillar, Massey Ferguson, Case, and New Holland.  Additional U.S. equipment in Angola is purchased and imported directly by the end user or informal resellers, who are often from South Africa.

Notwithstanding the difficult foreign exchange limitations, the high priority focus on agricultural development and increasing attention from the World Bank on this sector suggests that Angola is a market to watch for U.S. agricultural equipment and supply companies in the medium-term.

Specific sub-sector areas with strongest potential include:
Livestock – The Angolan government has established goals for increasing livestock production.  Current livestock activity is concentrated in southern Angola and is primarily based on small family farms with some existing larger producers.  Producers have told the U.S. Commercial Service they are interested in technologies for cattle raising, animal feed, veterinary services, and other solutions related to production and improving quality.

Grain and horticulture – The Angolan government's targets for meeting domestic corn supply through local production by 2020 will require substantial investments.  A number of private projects also focus on soy production.  Several large-scale government sponsored projects, such as the Quiminha Project, also focus on increasing horticulture production.  Angolan companies are in need of  equipment and input solutions, to include: seeds, fertilizers, pesticides, irrigation equipment and other types of production and processing equipment, such as silos and dryers.

Cold Chain - Strong potential also exists for U.S. exports related to cold chain infrastructure as Angola continues efforts to build its domestic food production and distribution capacity.  The Angolan government initiated PRESILD (Program for Restructuring of the Logistics and Distribution System of Products Essential to the Population) to support domestic agricultural production and distribution with a plan for infrastructure nationwide, but implementation has been slow due to budget limitations.  Ministry of Commerce regulations established in 2015 require companies to separate import from retail activities and to register their cold storage facilities.

Food Processing -  With increased production capacity, opportunities should expand for U.S. exports related to food processing equipment.  Several flour and grain milling projects are underway.  There is a high level of agriculture production lost due to the lack of access to markets and improper food handling.   Most processed foods are imported, including basic canned vegetables, which may offer opportunities for local value-added manufacturing concurrent with the expansion of agricultural production.
With the increased focus on agricultural production in Angola, many landowners are interested in  establishing production, but lack the requisite experience and background in agriculture.  Therefore, demand exists for international consultants and turn-key solutions from international suppliers.  Angolan companies already active in the agriculture sector often express concern about the lack of spare parts and services available in Angola for agricultural equipment maintenance.  While some agricultural equipment distribution exists in Angola, many farmers purchase agricultural equipment through neighboring countries or buy used equipment without receiving after-sales support.  Companies that can provide quality post-sales value-added services and support are likely to be very competitive in Angola.

Web Resources

Angola Ministry of Agriculture www.minagri.gov.ao
National Development Program www.governo.gov.ao
United Nations Food and Agriculture Organization (UNFAO) www.fao.org
World Bank (WB) www.worldbank.org
International Monetary Fund (IMF) www.imf.org
 

Prepared by the International Trade Administration. With its network of more than 100 offices across the United States and in more than 75 markets, the International Trade Administration of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.



Angola Agricultural Equipment and Machinery Trade Development and Promotion