The recent flurry of rail investment announcements is expected to draw additional agri-business investment to the region. The Angolan Minster of Transport, Ricardo Viega D’Abreu said, “...although ending in Malanje, [the Northern Corridor] can extend to the North and East of the country – the most populous regions of the country with natural characteristics conducive to the implementation of agribusiness, commerce, industry, and tourism activities.”
The Angolan PlanAgrão expects a 21% IRR on the needed $550 million US dollars they are seeking for improved agri-business along the northern corridor. With targets of 1.3 million MT of grain annually, Angola intends to feed itself and move towards becoming the breadbasket of southern Africa.
According to the United Nations FAO, of Angola’s 35 million hectares of arable land only 10% is cultivated. Angola is a net importer of food and imported a total of $2.75 billion dollars of food from a total of 60 different nations in 2022 according to the US Department of Agriculture. The Northern Corridor will facilitate Angolan and Congolese producers in serving the regional market consumers and those further afield.
Demand in Angola will continue to rise. 47% of the population of 36 million are between the ages of 15 and 35, according to the United Nations. With a rapidly expanding population driving demand for additional food quantities and product variety, the internal market of Angola will remain strong for the foreseeable future. Should Angolan producers exceed the targets laid out by PlanAgrão, the Northern and Lobito Corridors will easily provide outlets to foreign markets.
Labor is readily available to accompany the sought after agri-investment across Angola, particularly surrounding the Northern Corridor, where most Angolans live. According to the Angolan Ministry of Labor, agriculture accounts for 55% of employment within Angola, which presently fails to incorporate the +50% of youth (ages 16-25) who remain unemployed.
Presently, 80% of food production in Angola is done through small-scale farming. President João Lourenço has made it clear that Angola must diversify away from oil. Food exports accounted for less than 1% of GDP in 2022. With food export targets set at 4.6% of GDP by 2027, tremendous scale will be required to reach those goals. “More than ever, the world must prepare for a probable food crisis that is coming. Therefore, investing in agriculture, livestock, fisheries, wherever possible, is something that statesmen should have in their agendas,” President Lourenço said in a 2022 visit with the Prime Minister of Cabo Verde, Ulisses Correia e Silva.
With the anticipation of inland agricultural terminals to be included along the Northern Corridor, as highlighted by the All-American Rail Group in their December 9th, 2023 MOU with Angola, planning is underway to develop the logistics infrastructure necessary to help Angolan farmers quickly move their products to market.
Under the current administration, Angola has made strong moves towards privatization. To prepare for this transition in the agri-business sector, the Assemblia Nacional has been working to accelerate the processes by which agri-investors can access state-owned land and eliminate many of the bureaucratic hurdles associated with everything from bank credit to the importation of equipment.
Comments