Angola Key Message Update: Rising prices and below-average harvests determine crisis outcomes (IPC Phase 3), May 2024 – Angola

Key messages

• Food insecurity among poor and very poor households is due to below-average harvests, lower incomes due to lack of casual agricultural labor opportunities, and higher than normal market prices. The below-normal agricultural season, compounded by previous drought years, is resulting in low availability of casual agricultural labor on farms for cereal harvests. State and independent media also report hunger in the southern and eastern regions where poverty rates are high and rainfall is low. In addition, below-average harvest prospects in southern Huila and parts of Huambo and Bié are expected to reduce work opportunities for members of poor households in Cunene and Namibe who normally migrate to find work. The poor harvest will likely negatively impact the volume of staple food supplies flowing from Huila to Namibe and Cunene this year. Low rainfall in Namibe and Cunene is also detrimental to livestock health, with local reports confirming poor livestock body condition. Below-average harvests, below-average work opportunities, and high food prices will keep household purchasing capacity low during the post-harvest period. Crisis (IPC Phase 3) outcomes are expected through September for at least one in five households in parts of Huila, Cuando Cubango, and Cunene, as these households continue to rely on market purchases for their food needs. However, Minimal (IPC Phase 1) and Stressed (IPC Phase 2) area-level outcomes are expected through September in the rest of the country, where average rainfall has supported agricultural production.
• French Pressures on food prices due to macroeconomic and trade policies remain mixed. Food imports increased in the first quarter after falling in previous quarters, but are lower than the same period last year. In late May, the Ministry of Industry and Trade approved the additional importation of 270,000 tonnes of rice in three phases this year, with some commercial agribusinesses also harvesting 15,000 tonnes of rice in Malanje province. On May 17, a presidential decree established new regulations on informal trade that could increase food prices and reduce work opportunities through detailed rules for informal trade and bureaucratic requirements, such as obligation for merchants to obtain a seller card each year by submitting an identity document and fees to municipal administrations which often lack resources. However, at the end of May, the government and unions negotiated a new minimum monthly wage of 70,000 AOA (81 USD) and 50,000 AOA (58 USD) for small businesses, to adjust wages to inflated prices. The new monthly minimum wage represents an increase of approximately 55 percent and is expected to improve the purchasing capacity of some households for food and non-food needs.
• Angola’s annual inflation rate accelerated for the 13th consecutive month to reach 30 percent in May 2024, the highest inflation rate since June 2017. The latest inflation figure reflects the impact of the removal of the fuel subsidy and a weaker Angolan kwanza (AOA). In particular, prices for transport, health care, and miscellaneous goods and services have recorded notable increases. The National Bank of Angola is restricting foreign exchange transactions, and banks have reported difficulties in purchasing dollars outside an increasingly narrow exchange rate since the beginning of the second half of 2023. This continued rise in inflation will likely affect the purchasing power of poor and very poor households and their ability to meet their minimum food and non-food needs.

Recommended citation: FEWS NET. Angola Key Message Update, May 2024: Higher Prices and Below-Average Harvests Drive Crisis (IPC Phase 3) Outcomes, 2024.