(4 minutes read)
Following the footstep of most of the oil-dependent economies, Angola is actively engaged in a diversification plan to generate resources from other sources to hedge future uncertainties. Agriculture development is top on the agenda, having a conductive topography and land mass that is fertile and arable.
Oil is the lifeline for Angola, contributing 95% of its exports and a fair share of GDP (40%). Importantly, 65% of its resources are generated from the oil sector. Can the West African country hinge its growth prospects on oil alone at a time, worldwide use of fossil fuel is discouraged because of the carbon emission and consequent environmental impact?
Following the footstep of most of the oil-dependent economies, Angola is actively engaged in a diversification plan to generate resources from other sources to hedge future uncertainties. Agriculture development is top on the agenda, having a conductive topography and land mass that is fertile and arable. Yet, going by the current share of agriculture to the GDP, a common measure that assesses the level of agriculture in a country, Angola belies its potential. Agriculture accounts only for 6% of the GDP, a vector that pales into insignificance as compared to most of the countries in the continent.
Measures are afoot to shore up the share of agriculture not alone for upping its prominence but also to reduce its food imports to insulate the country from import vagaries. Figures for food import are significantly higher between US$ 200 and US$ 250 million annually, which the country can ill-afford going by its limited foreign exchange reserves. Angola’s foreign exchange reserves have been fluctuating and were in the comfort zone between 2011 and 2020. Between those years, the average reserves were over US$ 30 billion. But the pandemic and the slump in the global economy shaved off reserves to an all-time low of below US$10 billion., which was a matter of concern during the heavy import of essential goods and healthcare items.
Agriculture development has been a three-pronged strategy for Angola. Focus has been on three segments-cereals, fisheries, and cattle. Higher production can not only make good the heavy imports but also create an exportable surplus. There are steady markets for such goods in neighboring countries, with the dismantling of tariff walls under the African Free Trade Agreement (AfCFTA).
Apart from agriculture, the country is focusing on diamond mining and tourism. Being the third largest diamond producer in Africa, Angola has tapped through exploration only 40% of the diamond-rich territories. Presently, it is trying to attract foreign direct investments from major companies involved in exploration. Analysts maintain that to attract foreign investments, Angola has to do considerable policy tooling to ensure transparency and avoid human rights violations, such as child labor and rampant diamond smuggling. The other factor that holds back investments is poor physical infrastructure, telecommunications, and restrictive policies like unreasonable caps for remittances from the country.
Read Also:
https://trendsnafrica.com/france-and-angola-to-strengthen-partnership-in-food-and-energy-sector/
https://trendsnafrica.com/angola-sets-up-working-group-to-address-rising-pollution/
https://trendsnafrica.com/angola-takes-over-presidency-of-oacps/
Endowed with great scenic beauty, waterfalls, humming rivers, and a large stretch of virgin coastline, Angola can be a tourist paradise. But the flip side is that nothing much has been done to promote tourism in the country aggressively. Presently, it is reported that the government is preparing a roadmap for the development of tourism in the country. Analysts think that concrete steps are needed on an urgent basis to turn the vision into an achievable goal. Otherwise, dreamy projects to diversify the economy may continue to exist in papers.
