A below average <i>nacas</i> harvest expected in Bié, Huambo, and Huila

• The negative effects on food security of the ongoing macroeconomic shocks in Angola are somewhat outweighing the positive effects of the largely favorable 2023 cereal harvest. The exchange rate has stabilized, but month-on-month and year-on-year inflation are increasing. Overall, staple food price increases are outpacing any increases in poor households’ income. 
• Poor households in Bié, Huambo, and Huila were unable to plant at normal levels for the second agricultural season (nacas) due to poor weather conditions, including low humidity. Crop production from this season is expected to be low, which will negatively affect food security in these rural communities. 
• During the upcoming 2023-2024 main agricultural season, poor households will likely face lower access to inputs and, driven by the forecast El Niño, below average October 2023 to March 2024 main season rainfall. As a result, lower-than-normal agricultural labor opportunities and below-average crop and livestock production are likely. 
• In drought-affected areas of the southwest (Namibe, and Cunene, and Huíla), Stressed (IPC Phase 2) outcomes currently exist, but Crisis (IPC Phase 3) outcomes are expected by September. Similarly, in Bié and Huambo, Stressed (IPC Phase 2) outcomes are likely present currently, but deterioration to Crisis (IPC Phase 3) is expected during the upcoming lean season. 

Projected Outlook through January 2024

As reported in FEWS NET’s June Remote Monitoring Report, the negative effects on food security of the ongoing macroeconomic shocks in Angola are somewhat outweighing the positive effects of the largely favorable 2023 cereal harvest. Although the exchange rate has stabilized, both month-on-month and year-on-year inflation is increasing (Figure 1). The annual headline inflation rate rose to 12.1 percent in July from 11.3 percent in June. Meanwhile, the monthly inflation rate increased to 1.6 percent in July, the most in 17 months. Annual food and beverages price inflation accelerated for the third straight month to reach 11.7 percent in July compared to 8.4 percent in June. The annual transport price inflation rate accelerated to 6.5 percent in July from 5.6 percent in June following the phasing out of fuel subsidies. 

Additionally, the Government of Angola has recently restarted their repayment of loans from the IMF (4.5 billion USD through the Extended Funds Facility), Chinese Development Bank, China Exim Bank, and the Industrial Bank of China, which was paused due to the COVID-19 pandemic. External debt servicing is projected to increase to 5.6 billion USD over 2023-2024 and nearly 7 billion USD in 2025, up from 4.3 billion USD in 2022. The resumption of servicing the debt will result in lower access to USD for other expenses, including the importation of staple foods and supporting the kwanza exchange rate. 

The overall lower access to USD is also negatively affecting the government’s capacity to stock the Strategic Food Reserve (REA) as it typically would, and the company running the REA was recently changed and a new stocking strategy was put in place. The new strategy focuses on buying locally grown food products over imported foods. Under the new REA strategy, the products and prices of local purchases will be announced in advance, and wholesale markets and logistics centers will be instated. The new procurement strategy for REA is reportedly creating anxiety among market actors. Key informant information in the local markets of Huila, Huambo, and Cunene suggest that the prices of beans, maize meal, and rice have increased by 5-10 percent over the last two months. 

In the areas of concern in the southwest of Angola (Cunene, Namibe, and Huíla), poor households typically rely on a combination of casual labor, self-employment, and small-scale livestock sales to access income to purchase food, alongside food from small-scale crop production. Currently, most poor households in these areas are relying on the sale of chickens and small ruminants (where still available given previous drought-related livestock losses), labor migration, and local remittances. Typical self-employment activities such as the sale of traditional alcoholic beverages is limited given the low availability of natural resources following years of poor rainfall. Income from petty trade is declining due to the high cost of the transportation. The demand for casual labor is also low due to uncertainty around the next agricultural season following years of poor rainfall and the forecast for below-average rainfall. Field information suggests some poor households are instead engaged in labor migration to major construction projects. Labor opportunities are also available at the construction of Ndue and Calucuve dams, which started in March 2022 and are approximately 20 percent complete; however, direct labor opportunities are relatively low, overall employing around 1,000 people. Altogether, income is low for poor households in these areas and not keeping pace with staple food price increases. Poor households in Namibe, Cunene, and Huíla are, however, being targeted by the government’s social safety programs. 

In Bié, Huambo, and Huila, the main agricultural season was average, but crop production in the nacas season, from which poor households obtain about 50 percent of their crop production, was very low. During this season horticulture crops are produced, and lower production is resulting in lower dietary diversity alongside overall lower food access. Furthermore, poor households typically rely on the nacas season for seeds for the subsequent main season crop production. Amid low production, poor households are likely to use the nacas crop production largely for personal consumption during the lean season and are unlikely to retain any seeds for the main season. During times of low production, poor households typically send household members to nearby towns to engage in non-agricultural casual labor and purchase food from markets. However, amid high food prices, poor households in Bié, Huambo, and Huila struggle to purchase sufficient food to fill the gap of low crop production. These populations can seek government support, though households must first register, and key informants suggest there is a three-month backlog in the registration process. 

The Angolan government is preparing the next agricultural season, which is typically starts at end of September. The government plans to shift the responsibility for distributing agricultural inputs and technical assistance to a private company, and to the Agricultural Development Support Fund (acronym FADA in Portuguese) the responsibility of providing agricultural campaign credit to access inputs. Under the new authorities, recipients will now need to quality for the programs and pay for the inputs either upfront or via production at the end of the season. As such, some poor households who previously had non-conditional access are likely to have fewer resources for the upcoming season.

Lower access to inputs will also be driven by the fact that traders are facing difficulty importing high-quality seeds and as poor households have lower seed resources following past poor seasons. The anticipated lower access to inputs comes amid a forecast for below-average rainfall – driven by the El Niño – during the upcoming October 2023 to March 2024 main rainy season. Lower access to inputs and below-average rainfall will together lead to lower agricultural labor opportunities and below average crop and livestock production in 2024.  

Most poor households in both rural and urban areas across the country continue to face Stressed (IPC Phase 2) outcomes amid increasing staple food prices and seasonally high reliance on markets. In drought-affected areas of the southwest (Namibe and Cunene, and Huíla), Stressed (IPC Phase 2) outcomes likely currently exist, but Crisis (IPC Phase 3) outcomes are expected by September, as a result of consecutive years of poor livestock and crop production that has driven low access to food and eroded coping capacity. As a result of very low water availability in the southwest, many nomadic pastoralists no longer migrate in and out of the region, and many continue to travel longer than usual distances for forage. Similarly, in areas with low nacas production (Bié and Huambo), Stressed (IPC Phase 2) outcomes are currently likely among poor households, but Crisis (IPC Phase 3) outcomes are expected later in the lean season. In these regions, the low narcas production and high food prices will likely drive poor households to limit food intake resulting in small food consumption gaps at the peak of the lean season.