Angola has the resources to become one of the leading agricultural countries in Africa, reports the US Department of Agriculture's Foreign Agriculture Service. And once upon a time, it was.
Look up Angola and agriculture on Wikipedia and you'll see that Angola's history involved a flourishing tradition of family-based farming. The country was self-sufficient in all major food crops except wheat. Angola exported coffee and maize, in addition to other crops including sisal, bananas, sugar cane, cassava and cotton. In fact, coffee was once Angola's leading export and was considered among the best in the world.
Flash forward to today, post-independence and the civil war. Angola has changed from a self-sufficient exporter to a country that needs to bring in most of its food and other key commodities from abroad. The civil war in Angola displaced more than four million people and damaged the local infrastructure. The danger from mines deployed during the war which have not been recovered yet pose another challenge to farming and to the establishment of an agribusiness sector.
Currently, Angola imports more than half its food, with some estimates putting the figure as high as 90%, the USDA reports. The annual food bill amounts to some $5 billion, according to a Reuters article. And the impact on the economy of the steep drop in oil prices has led to food shortages in some areas.
Angola cultivates just 8% of its available land, according to the USDA, and agriculture accounts for a mere 10% of GDP. While much of the population still depends on agriculture for food, income and employment, about 80% of the farmers throughout the country are smallholders, Wikipedia says. Farmers cultivate very small plots of land, with very low agricultural productivity.
However, Agriculture is a real opportunity for Angola. Since people moved to the coast during the war, the center of the country is now open and ready to be cultivated. Angola has more than 2,000 acres of land that are currently unused and lying fallow. If the land mines can be destroyed, this substantial acreage can be used for farming and producing of essential crops that will no longer need to be exported.
The government has made the agricultural sector a priority, with programs focused on areas including the clearing of land mines, the development of family farming, development of commercial agriculture, and the construction and rehabilitation of irrigation projects. One project initiated by the government, reports Web site How we made it in Africa.com, is the Capanda Agro-Industrial Zone, situated in Malanje Province next to the Capanda hydropower dam on the River Kwanza. Spanning about 1,500 square miles, the zone has been earmarked for both agriculture and irrigation.
The World Bank has extended loans to Angola for farming, reports Our Africa. The agricultural sector has also attracted some investment. Reuters reports on thriving banana plantations in the tropical plains of Caxito facilitated by Chinese investment. As a result, banana production rose from 76,000 tons in 2012 to 247,000 in 2013.
The private sector really needs to step up in a big way. But investors in the agrarian sector do need to have a longer time horizon. Investors should keep in mind that return on investment in agriculture tends to take longer with generally higher outlays.
We recently invested in ETG, which is recognized globally as one of the fastest growing integrated agricultural supply chain groups. ETG provides a global link between farmers and consumers with services such as procurement, warehousing, processing and manufacturing of finished goods, and transportation and distribution.
Our longer-term objective is to create an ETG group in Angola, with the goal of reviving agriculture in the country. We believe it's possible to start with the arable land and focus on Angola's needs with crops such as vegetables, potatoes and cotton. The situation is imperative. The first step is to grow food for consumption at home, and then to cultivate cash crops that will bolster revenues and help diversify the local economy.
Angola was once an agriculturally rich country. With some assistance and dedication, it can be again.
Zandre Campos is chairman and CEO of Angola Capital Investments (ACI), an international investment firm that invests in companies in the healthcare, energy, transportation, hospitality, and real estate sectors throughout Africa. The mission of ACI is to create global value for developing countries in Africa, while contributing to their economic development.