SA will feel impact of Angolan import quotas

Agricultural exports to Angola are being limited by the government in order to protect and stimulate local industry in an effort to wean the country’s economy off its heavy reliance on oil revenue. A joint decree published by the Angolan Ministries of Agriculture, Fisheries, Industry, Commerce and Transportation, along with the Central Bank, announced the new import quotas recently. According to the Ministerial Decree, the purpose of the quotas is to diversify the Angolan economy by supporting non-oil sectors. Oil accounts for 98% of Angolan export revenues, the country’s oil minister Botelho de Vasconcelos is reported to have told journalists on the sidelines of June’s OPEC meeting in Vienna earlier this month. Its biggest customer is China, and Angolan president Jose Eduardo dos Santos paid an official visit to China in June in order to bolster trade between the two countries. As Africa’s second-largest crude oil exporter, Angola produces 1.7-1.8 million barrels per day of heavy, sweet crude, which is low in sulphur. In January this year the government of Angola revoked import licences for 25 agricultural products including poultry, effectively blocking imports of these products for an unspecified duration, according to the Global Agricultural Information Network of the United States Department of Agriculture (USDA). These changes in Angolan’s trade policy affect some US$2.5 billion worth of agricultural Angolan imports from around the world, according to the USDA. Import quotas have been placed on vegetable oil, maize flour, salt, rice, sugar, water, sodas, eggs, potatoes, garlic, onion, beer, juices and nectars. Countries most affected are Portugal, the United States, Brazil and South Africa. Angola imports machinery and electrical equipment, vehicles and spare parts; medicines, food, textiles and military goods. According to Trade Map 2015, Portugal was the leading exporter of food and beverages to Angola in 2013 (worth R9.2bn), followed by Brazil and South Africa valued at R6.8bn and R2.9bn respectively. Other top exporters to Angola were the United States (R2.6bn), India (R2bn) and Malaysia (R1.8bn). Angola is currently South Africa’s fourth-largest export destination in Africa, according to the Western Cape Destination Marketing, Investment and Trade Promotion Agency (Wesgro). In 2013, South Africa exported food and beverages valued at R2.8bn to Angola compared to R2.2bn in 2012, representing an increase of 31%, according to Wesgro. Western Cape exports fall outside the current Angolan import restrictions. The leading export product from the Western Cape to Angola in the food and beverages sector is liqueur, valued at R299m followed by apples, pears and quinces (R163m) and other fermented beverages (R160m). The Western Cape accounts for 52.3% of South African food and beverage exports to Angola. South African exports of sugar (worth R279 million in 2013) are expected to be affected by the new quotas. Investors in the agricultural sector may be attracted to Angola by the support for buying local being provided by the government. Business Monitor International 2015 describes Angola as a “high-risk, highreward food and drink market in sub-Saharan Africa." It is currently an exporter of crustaceans, whole frozen fish, coffee and nonalcoholic beverages, with its biggest market in 2013 being Spain. INSERT 98% The percentage of export revenue for which oil accounts.