Agricultural Markets in sub-Saharan Africa

With some of the fastest growing demographics and a strengthening urban middle class as well as large amounts of agriculturally productive land and natural resources, one of the most important emerging regions in the world is sub-Sahara Africa. This article explores some of the emerging markets in the African continent with a particular focus on agribusiness and commercial opportunities.

Agricultural Markets in sub-Saharan Africa

Nations such as Angola, Nigeria, and Algeria are particularly important because of their large oil reserves and high demand for consumer goods. In the case of Angola, whose GDP amounts to approximately US$103 billion, the food and agriculture industry represents a great opportunity for international producers and providers to position themselves within an emerging market. A member of the Organization of Petroleum Exporting Countries, Angola’s economy is highly dependent on its petroleum exports, which account for approximately half of the country’s GDP and 75% of the government budget. Thus, Angola’s currency and economic growth are closely tied to the prices of the international oil markets, which means that its national currency has undergone substantial devaluations over the last couple of years. This economic scenario puts a real strain on the Angolan economy, prompting the government and the private sector to look into economic diversification.

However, in the short term, the Angolan market of more than 25 million people has lost some of its purchasing power and this has led to a decrease in the amount of agricultural goods imported into the country. For example, Angola imported approximately US$2.6 billion worth of agricultural products during 2015, which represents a sharp decrease from almost US$5 billion in 2014. Within the food and agriculture sector, the main sources of imports into Angola include Portugal, Brazil, South Africa, and the United States. Regarding domestic production, it is estimated that more than 75% of all nationally produced agricultural products are sold through informal markets. The main domestic products include banana, sugarcane, coffee, corn, and cotton.

Nevertheless, due to new governmental policies, Angola’s consumer goods market is witnessing an important transition from mostly informal distributors to a much more formalized and structured marketplace. Most of the up-and-coming supermarkets try to integrate the traditional feel of an outdoor marketplace to their modern warehouses in order to appeal to larger crowds of locals. Concentrated in urban settings, these new supermarkets cater to the middle and upper classes; furthermore, a good amount of these chains are partially managed by foreign interests such as South African or European.

Within the food and agriculture market, the most imported and popular goods are frozen meats, such as chicken and bovine. For example, Angola imported a total of US$209 million worth of broiler meat during 2013, of which US$109 million came from US producers. Likewise, beer made from malt is a popular beverage, which amounted to US$173 million in imported value during 2013. Finally, Angola is an attractive destination for agricultural investment and export because of its recently renovated transportation infrastructure, which included both railways and roads.

(Read more about Economy and Agriculture between India and the United States)