Crisis (IPC Phase 3) is expected to prevail for drought-affected households in the southwest through January 2023

• Across most of the country, households are facing Minimal (IPC Phase 1) outcomes as they consume recently harvested crops and participate in planting for the nacas season. National production estimates for the 2021/22 agricultural season are near the five-year average and above last year.

• In the southwest, parts of Namibe, Cunene, and Huila provinces are facing Crisis (IPC Phase 3) conditions as a result of below-average production due to consecutive years of severe drought. Poor households in these areas have access to limited income from harvesting labor and pastoral activities, reduced or no access to own-produced crops, and are relying on markets for food purchases.

• In some areas, households are participating second season or nacas planting activities, but below-average soil moisture conditions in the southwest and limited access to inputs will hinder nacas planting and harvests during the outlook period. A normal start to the 2022/23 main cropping season is expected in October, while below-average rainfall is likely in northern parts of the country, and average to above-average rainfall is likely across the rest of the country.

• Improved oil revenues continue to bolster the national economy and strengthen the value of the Kwanza, curbing imported inflation for food items. Future COVID-19 lockdowns and ongoing supply chain disruptions in China could potentially slow down the uptake of Angolan crude.

• From July 2022 to January 2023, poor households in Namibe, Cunene, and Huila provinces will intensify their typical livelihoods strategies earlier than normal due to below-average yields and significantly below-average income through 2021/22 harvesting labor. Limited second season planting and harvesting is also expected, as well as increasing food prices once the lean season begins in November. As more poor households become reliant on markets, lower-than-normal purchasing power will continue to drive Crisis (IPC Phase 3) outcomes in these areas.  

For the current 2021/22 agricultural season, national estimates indicate that crop production is near the five-year average and above 2020/21 seasonal production due to higher area planted and increased yields in the central and northern regions. Most rural households throughout the country are currently facing Minimal (IPC Phase 1) outcomes as they are consuming recently harvested crops from the 2021/22 season and this is expected to continue through January 2023. However, households in several provinces in the southwest are experiencing a poor harvest, depletion of food reserves, and limited income-generating opportunities after experiencing consecutive years of drought this season. Currently, poor households in Namibe, Huila, and Cunene are in Crisis (IPC Phase 3) and these outcomes are likely to continue through the outlook period.

In these areas, main season crops were affected by prolonged dry spells with abnormally high temperatures. According to the satellite-based Water Requirement Satisfaction Index (WRSI) extended to the end of the 2021/2022 season (Figure 1), water satisfaction for maize crops was below 50 percent in much of the southwestern region which resulted in crop failure. Very few households had the opportunity to replant due to limited inputs. The limited number of households that did replant are consuming from their own productions and yields are expected to last until August. Nonetheless, most poor households have already exhausted their own food stocks and are dependent on market purchases.

Without harvests to consume or sell, very poor and poor households are unable to meet their minimum food needs because they have insufficient income for market purchases. These households have limited livestock and are prematurely beginning to intensify their typical livelihoods strategies, including selling more animals than usual, engaging in the production and sale of charcoal, or reducing spending on non-food items to buy food, resulting in the emergence of Crisis (IPC Phase 3) outcomes. Intensification of these livelihood strategies is expected to  be at its highest from October to January.

Current soil moisture (Figure 2) is below average in southwestern and southeastern regions of the country. These conditions are expected to continue in the south until the normal start of the rainy season in October. Regional forecasts indicate that below-average rainfall is expected in northern parts of the country, while average to above-average rainfall is expected in the rest of the country during the 2022/23 cropping season.

Improved oil revenues bolstered the exchange rate of the Kwanza which traded at an average of Kz406/$ in May from a record high of Kz660/$ in November 2020. The stronger local currency has dampened the impact of rising global food prices at the national level, which is a reprieve given the high dependence on imported food products, including wheat flour, pastas, seed oils, rice, sugar, pork, palm oil, and poultry.  Headline annual inflation rate continued to decelerate to 24.4 percent in May, down from 25.8 percent in April. The annual inflation rate for the food and beverage sub-index moderated to 28.8 percent in May from a peak of 34.3 percent in January. Given ongoing disinflation and a strong Kwanza curbing imported inflation, in May the central bank kept the interest rate at 20 percent. An interest rate cut is even possible during the outlook period as inflation continues to moderate from the previous elevated levels.

Although government oil revenues rose 89 percent this year compared to 2021 levels due to higher global oil prices, future COVID-19 lockdowns and ongoing supply chain disruptions in China, which purchases 70 percent of Angola's oil, could potentially slow down the uptake of Angolan crude, along with increased competition from discounted Russian crude oil. In May, Angola's crude oil production dipped moderately to 1.16 million barrels per day (bpd), from the 1.18 million bpd in April due to technical difficulties in deep-water oilfields.

Angola's current account and the external position have improved from the windfall of high global oil prices. A current account surplus is expected to reach 12.3 percent of GDP this year and strengthen the government's fiscal position in 2022.  Angola’s current account and external position has improved from the windfall of high global oil prices. A current account surplus is expected to reach 12.3 percent of GDP this year and strengthen government’s fiscal position in 2022. 

In southwestern Angola, a small number of households have managed to make several reseeds and their crops have reached maturity. These households are currently consuming food from their own production, while most poor households in the region have limited to no access to own-produced crops and are relying entirely on food purchases. Food prices in these areas are actually above the national average due to limited supplies in markets. With lower-than-normal purchasing power, an expected normal start to seasonal rains, and the lean season, poor households in Cuenene, Huila, and Namibe will continue to face Crisis (IPC Phase 3) food security outcomes from August 2022 through January 2023.