ANGOLA – Angola has announced plans to invest US$5.7 billion in various agriculture-focused projects under the National Plan for Grain Production dubbed PlanaGrao with an overall goal of raising grain production to 6 million tonnes by 2027.
The plan revealed by the Ministry of Economy and Planning is aimed at reducing dependence on grain imports which eat into the country’s foreign reserves.
From the Angola executive report, import bill for this category of foodstuffs amounts to more than US$791 million each year and is mainly driven by purchases of wheat and rice.
Under PlanoGrao the country intends to reduce this import bill by raising its grain production from the current 3 million tonnes to 5 million tonnes for maize, wheat, and rice and an additional 1 million tonnes for legumes.
According to the executives, part of the US$5.7 billion investment will be channeled to renovation of road infrastructure to open up production areas and increase the surface area of targeted crops on 2 million hectares of additional agricultural land.
Out of the 2 million hectares earmarked for agriculture, 673 thousand hectares will be used for wheat production, according to the report from the Ministry of Economy and Planning
600 thousand hectares will be used in rice production, while 400 thousand hectares will be put under soybean cultivation.
The report further indicated that some 326 thousand hectares will be reserved for corn production.
Part of the funds will be advanced to financial institutions including the Development Bank of Angola (BDA), the Angolan Venture Capital Active Fund (FACRA), and commercial banks to improve access for local private sector operators to credit with more attractive interest rates.
Agriculture has become a key government priority in recent years as revenues from oil started to decline and become increasingly unpredictable due to price instability in the global market.
The impact of these diversification programs can be most felt in wheat milling where 4 milling factories have opened since 2017, increasing the country’s total capacity to approximately 1 million tonnes.
The rise in milling capacity has led to a shift from wheat flour importation to wheat grain which is significantly cheaper.
The largest supplier is the European Union, which shipped 380,000 tonnes of wheat in 2020. Russia ranked second with 199,000 tonnes.
Russia and Ukraine accounted for about 30% of Angola’s wheat imports in 2021, and their war has impacted free movement of wheat.
The Association of Wheat Flour Producers of Angola said Russia’s ongoing military conflict with Ukraine and the ensuing surge in wheat prices could cause the consumer price of wheat flour in Angola to increase by 40% or more.
With PlanoGrao, Angola may finally be able to unshackle itself from the dangers of over-reliance on other countries for its food and will be in a better position to chat a path towards food security.