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Gov't earmarking $500 mln annually to agribusiness
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Part of drive to diversify economy away from oil
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Angola seeks to reduce food imports, become exporter
By Jorgelina do Rosario and Joe Bavier WASHINGTON, April 13 (Reuters) - Angola is ramping up investment in agribusiness as it seeks to wean itself off imports, diversify its economy away from a dependence on oil and, eventually, become a regional food exporter, its economy minister told Reuters on Thursday.
Under President Joao Lourenco, the southern African OPEC member - a former communist state - has embarked upon an ambitious plan of reforms including privatisations and investment aimed at revamping the economy.
Efforts to reform the agriculture sector were given added impetus with the outbreak of the COVID-19 pandemic, Minister of Economy and Planning Mario Caetano Joao said in an interview on the sidelines of the International Monetary Fund and World Bank spring meetings. "In 2020, we heard about lockdowns due to COVID. We started to be very worried, because if you are 95% dependent on food coming from those markets, it means that you are going to face difficult times," he said.
In response, the finance ministry increased annual financing for agribusiness via the National Development Bank to $500 million, Caetano Joao said.
Some $400 million of that is focused on increasing production of crops including corn, soybeans, wheat and rice. "Our National Development Bank is financing a lot of small projects, which is good because small projects sometimes don't have access to the financial sector," he said.
The private banking sector, meanwhile, is responsible for the bulk of financing to larger agribusiness enterprises.
That lending has been encouraged by a decision to allow banks to use their reserves with the central bank to finance the sector, which has grown by around 5% in each of the past three years, Caetano Joao said.
Angola in 2021 emerged from a five-year recession caused largely by a slump in its oil sector. Securing future positive growth, he said, would depend on the country's ability to grow the non-oil economy, which is dominated by agriculture.
The government is projecting economic growth of 3% this
year. Over the next five years, growth is forecast at an average
of 3.6%, with non-oil sector growth of 4.6% and oil sector
growth of 1%, Caetano Joao said.
While in the short term, the country would work to replace
imports of food staples, the minister said Angola currently
cultivated just 20% of its 50 million hectares of arable land
and was eyeing an expansion that would make it a food exporter.
"You may say 'OK, but why would you produce a lot of
agribusiness products if you are just 30 million (people), and I
will tell you what we are doing is we are also looking for
market access."
(Reporting by Joe Bavier and Jorgelina do Rosario; Editing by
Andrea Ricci)
