March 11, 2014

Angola aims to boost its agricultural productivity

In an aim to curb its dependence on food imports, Oil-rich Angola intends to roll out measures to boost productivity in its agriculture sector, but there are concerns price hikes will harm the poor.

New import duties for selected products including fruits, vegetables, eggs and drinks are set to enter into force in March.

The government hopes that the new levies will discourage imports and prod domestic industries to diversify from oil.

Angola was an agricultural powerhouse known for its coffee and rubber production before its independence in 1975. But nearly three decades of civil war that left vast tracts of land littered with landmines robbed the country of its farming prowess.

It left the south-western African country heavily reliant on food imports, which account for 90% total food consumed.

Angola spent over US$3.6 billion on imported food and drinks alone in the first nine months of last year, according to the trade ministry.

Authorities now want to lessen that dependence and encourage local production, which will hopefully eventually lower food costs in the country where two thirds of the population live on less than two dollars a day, despite the country's oil wealth.

However importers fear the new customs duties will push up the cost of some imported goods by a third, as well as the inflation rate which currently stands at 7.8%.

"This will lead to an increase in import costs of between 5% and 35%, which will have an impact on prices in general," said Federico Crespo, who operates an Angolan import firm Oxbow.

The dependence on imported goods is one of the reasons why Angola's capital Luanda is ranked among the most expensive cities in the world.