Angola - Country Commercial Guide
Angola- Agricultural Equipment

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2021-09-08

Overview

The lack of commercial credit in the market and severe shortfalls in foreign exchange have 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.  

In order to correct the Angola Invest program inefficiencies, the Angolan government created the Credit Support Project (PAC-Programa de Apoio ao Crédito) that is aimed to support the Program for Production Support, Export Diversification and Import Substitution (PRODESI).

The Credit Support Project is part of PRODESI and provides funding for investment projects that contribute directly or indirectly to the domestic production of 54 products.  They are related to the productive sector and the majority of these products include agricultural goods such as sugar, rice, beef, wheat flour, beans, cassava flour, maize flour, milk, spaghetti, soybean oil, palm oil, common salt, eggs, chicken meat, meat, pork meat, corn grain, cassava, sweet potatoes, reindeer potato, tomato, onions, garlic, carrot, pepper, cabbage, lettuce, banana, mango, pineapple, tilapia (cacusso), horse mackerel from Cunene; sardinella aurita (lambula), sardinella maderensis (reed), sunflower edible oil, peanut oil, honey,  beer, juices, soft drinks and table water.

By June of 2021, 1,431 projects were received of which, 795 were approved in an amount of US $1.1B.  Angolan banks, which participated in the program included Banco Internacional e Comercial (BIC), Banco Millennium Atlântico (BMA), Banco Comercial do Huambo (BCH), Banco Fomento Angola (BFA) and Banco Negócio Internacional (BNI), Standard Bank Angola (SBA), Banco Angolano de Investimento (BAI), Banco Comercial e Industrial (BCI), Banco de Desenvolvimento de Angola (BDA) and Fundo de Garantia de Crédito (FGC).   For more details on PRODESI/PAC, please access https://prodesi.ao/financiamento/pac

In addition, the Angolan government has engaged with multilateral development banks to provide loans to the private sector to develop productive industries including 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) – is 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 eight to nine years.  Through  a presidential decree Gesterra took over four agriculture projects 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”.  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 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 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 attention on Angolan agriculture.  For example a USD 73 million Spanish line of credit was announced in 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.

As part of the Angolan government’s privatization program, ProPriv 2019-2022, under Presidencial Decree 250/19, approximately 25 agriculture companies have been listed for privatization.  These publicly owned companies include production and processing of tomatoes, etc.   For a complete list of these companies please visit Bodiva

Ag equipment, inputs and vet supplies

2018

2019

2020

2021

Estimated

Total Local Production

0

0

0

0

Total Exports

0

0

0

0

Total Imports

0

0

55

70

Imports from the US

38

50

8.7

10

Total Market Size

1.6

8.3

55

55

Exchange Rates

38

50

520

639

(total market size = (total local production + imports) - exports)
Units:US$ 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

•              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 the 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 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 Program for Restructuring of the Logistics and Distribution System of Products Essential to the Populatio (PRESILD) 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 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.

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

 

For more details, contact:

Manuel Cafala, Commercial Specialist

U.S. Embassy Luanda

Rua Huari Boumedienne, #32

Miramar, Luanda, Angola

Tel: (+244) 222 641 000, ext. 1602

E-mail: manuel.cafala@trade.gov