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Angola: Update on key message: Price increases and sub-average harvests lead to crises (IPC Phase 3), May 2024 – Angola

Angola: Update on key message: Price increases and sub-average harvests lead to crises (IPC Phase 3), May 2024 – Angola
Angola: Update on key message: Price increases and sub-average harvests lead to crises (IPC Phase 3), May 2024 – Angola

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Key news

  • Food insecurity among poor and very poor households is caused by below-average harvests, income losses due to limited casual agricultural work, and above-average market prices. The below-average harvest season, exacerbated by the drought of previous years, results in few casual jobs available on farms to harvest grain. State and independent media also report hunger in southern and eastern areas with high poverty rates and low rainfall. In addition, below-average harvest prospects in southern Huila and some parts of Huambo and Bié are expected to reduce job opportunities for poor household members from Cunene and Namibe who normally migrate abroad in search of work opportunities. The poor harvest is likely to negatively impact the amount of staple food commodities flowing from Huila to Namibe and Cunene this year. Low rainfall in Namibe and Cunene is also having a detrimental effect on livestock health, with local reports confirming poor body condition of livestock. Sub-par harvests, sub-par employment opportunities and high food prices will keep household purchasing power low in the post-harvest period. In parts of Huila, Cuando Cubango and Cunene, Crisis (IPC Phase 3) situations are expected for at least one in five households by September as they continue to rely on the market to meet their food needs. However, in the rest of the country, where average rainfall supported agricultural production, widespread Crisis (IPC Phase 1) and Stress (IPC Phase 2) situations are expected by September.
  • Pressures on food prices from macroeconomic and trade policies remain mixed. Food imports rose in the first trimester after declining in previous ones, but are below the same period last year. In late May, the Ministry of Industry and Trade approved the continued import of 270,000 tonnes of rice in three phases this year, with some commercial agribusinesses in Malanje province also harvesting 15,000 tonnes of rice. On 17 May, a presidential decree issued new regulations on informal trade that reportedly could increase food prices and reduce job opportunities through detailed rules on informal trade and bureaucratic requirements such as requiring traders to obtain a vendor card annually by submitting an ID and a fee to often underfunded local governments. However, in late 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 the inflated prices. The new monthly minimum wage represents an increase of around 55 percent and is expected to improve the purchasing power of some households for food and non-food items.
  • Angola’s annual inflation rate rose for the 13th consecutive month in May 2024, reaching 30 percent, the highest inflation rate since June 2017. The latest inflation rate reflects the impact of the elimination of fuel subsidies and a weaker Angolan kwanza (AOA). In particular, prices of transport, health care, and various goods and services experienced significant increases. The National Bank of Angola has restricted foreign exchange trading, and banks have reported difficulties purchasing dollars outside an increasingly narrow exchange rate band since the beginning of the second half of 2023. This continued increase in inflation is likely to 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: Price increases and sub-average harvests lead to crises (IPC Phase 3), 2024.

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