Angola faces practical and psychological barriers to using agriculture to diversify its economy away from oil, the country’s finance minister has warned.
Oil is critical to Angola’s economy, producing nearly 75% of government revenue, according to the US International Trade Administration, and the vast majority of exports.
But the decarbonisation of the global economy will force Angola to wean itself off oil. Agriculture can take up the slack, but the country lacks the necessary infrastructure.
“The challenge is infrastructure,” said Vera Daves de Sousa, Angola’s finance minister, at a World Bank panel on agriculture and food in Washington on Wednesday. “Roads need to be good enough to make sure we can move production to the city, and we need good storage.”
Agriculture provides about 10% of Angola’s GDP but only around a tenth of the available agricultural land is cultivated, according to the US Department of Agriculture. Most of Angola’s farms are family ventures.
The country used to be a major exporter of goods such as coffee, sugar cane, bananas and cotton, but the 27 year civil war that ended in 2002 was disastrous for agricultural production. Now, coffee and bananas make up just 20% of agricultural exports, with bran contributing the lion’s share at 77%.
Mindset change needed
“But first of all it’s a change of mindset,” said de Sousa. “We need to create awareness about the importance of diversifying the economy.” Building mechanisms to allow the private sector to invest in agriculture was critical, she said.
“We are doing what is necessary to create a good fiscal environment to attract that interest, by putting in place liquidity within financial institutions for the private sector that want to invest, creating financial lines open for participation,” she said.
Interest is coming, and de Sousa is optimistic. “The financial system will shape itself to accommodate the agribusiness and have investment rooms at the banks ready to adapt to that niche,” she said. “We also want to see how we can bridge the gap between those producing and those who want to buy. We want to forge new relationships.”
Most of Angola’s production comes from small farms — it wants to develop larger scale agriculture. “We see strong movement in terms of family agriculture, small farmers, but we need to keep moving to scale up commercial agriculture,” she said.
But there is a further complexity. It is not enough just to expand agriculture — it has to be climate-resilient, in a country that like many in Africa is already suffering from climate change.
In 2022, a drought in the south of Angola, the country’s worst for 40 years, left nearly 4m people in a state of food insecurity. “We are working with multilateral partners,” said de Sousa. “We have a project with the World Bank to build resilience to the consequences of climate change for farmers and the entire agricultural production. We are doing our best to mitigate the impact of climate change.”