Tropical Fruit Value Chain Expansion
Tropical Fruit Value Chain Expansion
Business Model Description
Invest in the production phase for establishing orchards, cold storage facilities, and processing units aims to supply both domestic and international markets, leveraging Angola's diverse agroecological zones and abundant tropical fruit offerings. Integral to this business model is skills development through vocational training, encompassing agricultural techniques, sanitation and phytosanitary measures, as well as transportation and logistics.
Expected Impact
Enhance livelihoods, support food security and ensure environmental preservation in Angola and community inclusion.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Angola: Huambo
- Angola: Kuanza Sul
- Angola: Benguela
- Angola: Bengo
- Angola: Uíge
Sector Classification
Food and Beverage
Development need
Investing in sustainable agriculture is pivotal for tackling poverty and climate change. It's significantly effective in raising incomes among the poorest, with the World Bank highlighting its power to boost shared prosperity and meet future food security needs (1).
Policy priority
The government is prioritizing family farming, providing access to essential inputs for fundamental products, while also promoting commercial farming to foster innovation and productivity (2).
Gender inequalities and marginalization issues
Nearly 50% of family farm heads are in the 35-45 age range, with a significant representation of women, though they have lower educational levels. This indicates the need for gender-focused development in agricultural employment and education (11). Women have lower quality jobs than similarly-skilled men; 86% of employed women engaged in vulnerable jobs (defined as own-account workers and contributing family workers) compared to 67% of men (25). Given the global patterns in agriculture, it is likely that issues of access, equity, and income affect women, who often make up a large proportion of the agricultural workforce (6).
Investment opportunity introduction
Domestic consumption is growing and neighbouring countries can be a target market for export. Moreover, the country is rich in water sources. In 2022, the country exported beer, juices, and soft drinks for over USD 10 million (3).
Key bottlenecks introduction
Key bottlenecks in the agricultural may include vulnerability to climate change and climate shocks, low productivity and market access (4).
Food and Agriculture
Development need
Angola's tropical fruit sector, leveraging diverse agroecological zones, underutilizes its arable land, with only an estimated 10% currently cultivated. Investment in expanding fruit cultivation, like mangoes, bananas, and papayas, promises enhanced market participation (4).
Policy priority
The Angolan government has initiated the Agricultural Development Fund to support tropical fruit producers. The development of the SADC Free Trade Area and the Angola Commercial Agriculture Project underscores the commitment to increase agricultural productivity (5).
Investment opportunity introduction
The sector is growing and national production promoted by the PRODESI programme. Neighbouring countries can be a target market for export, while international markets are an opportunity for tropical fruits (17).
Key bottlenecks introduction
Key bottlenecks in the agricultural sector that could affect tropical fruit value chains may include logistics and transportation challenges, lack of access to finance, insufficient technical expertise, and barriers to entry for smallholder farmers (7).
Agricultural Products
Pipeline Opportunity
Tropical Fruit Value Chain Expansion
Invest in the production phase for establishing orchards, cold storage facilities, and processing units aims to supply both domestic and international markets, leveraging Angola's diverse agroecological zones and abundant tropical fruit offerings. Integral to this business model is skills development through vocational training, encompassing agricultural techniques, sanitation and phytosanitary measures, as well as transportation and logistics.
Business Case
Market Size and Environment
> USD 1 billion
5% - 10%
The fresh fruits market in Angola projects a CAGR of 9.1% from 2023 to 2028, reaching USD 2.6 billion, indicating a substantial market for tropical fruit value chains (9).
Indicative Return
10% - 15%
According to the EU-UNCTAD joint initiative for Angola, known as Train for Trade II, and their conducted workshops on value chain mapping, MSMEs operating within the tropical value chain sector have the potential to achieve a 14% gross margin on market conditions (10).
Investment Timeframe
Short Term (0–5 years)
The agricultural campaigns in Angola, such as the 2021/2022 period, indicate an annual cultivation and harvest cycle. Considering the growth rate and development programs, an investment in tropical fruit value chains may begin to generate returns within 1 to 2 years post-harvest, considering the time needed for fruit maturation, harvest, and entry into the market (11).
Ticket Size
USD 1 million - USD 10 million
Market Risks & Scale Obstacles
Business - Supply Chain Constraints
Crop Vulnerability to Pests
Market - Volatile
Impact Case
Sustainable Development Need
Food security remains a challenge in Angola, particularly in the Southern provinces hit by climate change-induced droughts. Facing this challenge, the 2023-2027 National Development Plan (NDP) sets food security as one of the two major pillar of development planning. Food security is closely related with other two development challenges: income generation in rural areas, particularly smallholder farmers, and nutrition, particularly for children.
Gender & Marginalisation
Nearly 50% of family farm heads are in the 35-45 age range, with a significant representation of women, though they have lower educational levels. This indicates the need for gender-focused development in agricultural employment and education (11).
Women have lower quality jobs than similarly-skilled men; 86% of employed women engaged in vulnerable jobs (defined as own-account workers and contributing family workers) compared to 67% of men (25).
Expected Development Outcome
Expanding the tropical fruits value chain can lead to increased agricultural productivity, contributing to food security, and economic diversification. It can also aid in achieving Angola's goal of reducing food imports and foster self-sufficiency (15).
Gender & Marginalisation
Development in the tropical fruits sector can offer employment opportunities, particularly for women and rural communities, thus addressing gender inequalities and economic marginalization.
Primary SDGs addressed
1.1.1 Proportion of the population living below the international poverty line by sex, age, employment status and geographic location (urban/rural)
According to the Angola Poverty Assessment by the World Bank, the incidence of poverty in Angola as of 2019 was 32.3% at the national level (16).
25% by 2025 (16).
2.4.1 Proportion of agricultural area under productive and sustainable agriculture
For 2020, 10% of the country’s arable land was under cultivation (22).
N/A
15.a.1 (a) Official development assistance on conservation and sustainable use of biodiversity; and (b) revenue generated and finance mobilized from biodiversity-relevant economic instruments
For 2021, the proportion of women with ownership or secure rights over agricultural land in Angola was 64% (23).
N/A
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Indirectly impacted stakeholders
People
Corporates
Outcome Risks
Resource Depletion: Intensive farming may lead to water scarcity and soil degradation, harming local ecosystems and future agricultural productivity.
Cultural Displacement: Commercialization may overshadow traditional farming practices, eroding cultural heritage and local biodiversity.
Labor Exploitation: Rapid expansion could lead to poor working conditions, exploitation, especially of vulnerable groups, if labor regulations are not strictly enforced.
Impact Risks
Lack of necessary skills among workers could hinder employment opportunities, impeding poverty reduction efforts.
Without proper skills, farmers may not effectively adopt sustainable practices, risking productivity and environmental harm.
Impact Classification
What
Increased sustainable production and export of tropical fruits, enhancing food security and economic growth.
Who
Local farmers, women, marginalized groups, private sector, and public institutions, focusing on rural communities.
Risk
A lack of necessary skills among workers and farmers could hinder employment opportunities, impede poverty reduction efforts, and risk both productivity and environmental sustainability.
Contribution
Establishing orchards, cold storage facilities, and processing units contributes to enhancing Angola's agricultural productivity and export capacity, potentially transforming the agricultural sector and driving economic development.
How Much
The business model aims to increase the export share of Angolan agricultural products in the mid term of operation, aiming for an additional growth annually thereafter, contributing significantly to Angola's GDP from agriculture.
Impact Thesis
Enhance livelihoods, support food security and ensure environmental preservation in Angola and community inclusion.
Enabling Environment
Policy Environment
Angola's private investment and export promotion agency has as one of its objectives to integrate tropical fruit producers into the supply chain of companies with export capacity and increase the number of producers able to meet international export standards and requirements (24).
Financial Environment
Financial Incentives: Private Investment Law (Law 10/21 of 22 April 2021) offers incentives such as tax breaks, subsidies for sustainable farming practices, and support for infrastructure development. It promotes foreign direct investment in agriculture (including in tropical fruit production), offering a conducive legal framework and potential partnerships with local stakeholders (19).
Regulatory Environment
The Angolan government has initiated the Angola Commercial Agriculture Project (PDAC) with a USD 230 million investment to increase agricultural productivity and market access for commercial farms, including tropical fruit (5).
Marketplace Participants
Private Sector
Fazenda Girassol, Banco BAI.
Government
Ministério da Agricultura e Florestas (MINAGRIF), Instituto de Desenvolvimento Agrário (IDA).
Multilaterals
United Nations Development Programme (UNDP), World Bank, International Finance Corporation (IFC).
Non-Profit
Ministry of Foreign Affairs of the Netherlands
Target Locations
Angola: Huambo
Angola: Kuanza Sul
Angola: Benguela
Angola: Bengo
Angola: Uíge
References
- (1) Farmers Review Africa (2022). Angola has potential as a future agriculture powerhouse. Source: https://furtherafrica.com/2022/09/15/angola-has-potential-as-a-future-agriculture-powerhouse-world-bank/.
- (2) Government of Angola (2023). Programa de Apoio à Produção, Diversificação das Exportações e Substituição das Importações. Source: https://governo.gov.ao/programa/prodesi.
- (3) General Tax Administration (AGT) (2022). External trade statistics.
- (4) World Economic Forum (2022). Angola's agricultural sector could become Africa's powerhouse. Here's why. Source: https://www.weforum.org/agenda/2022/09/angola-agricultural-sector-powerhouse-of-africa/.
- (5) Ministry of foreign affairs of the Netherlands (2019). Lobito Corridor (Angola) - Fruit mapping. Source: https://www.rvo.nl/sites/default/files/2019/12/Lobito-Corridor-Angola-Fruit-mapping.pdf.
- (6) IFC (2021). Women in Agribusiness Value Chains. Source: https://www.ifc.org/en/insights-reports/2021/women-in-agribusiness-value-chains.
- (7) United Nations (2023). Increasing standard and quality compliance capacity of the Viet Nam’s tropical fruit value chains to promote exports. Source: https://vietnam.un.org/en/247223-increasing-standard-and-quality-compliance-capacity-viet-nam%E2%80%99s-tropical-fruit-value-chains.
- (8) World Bank (2019). Creating markets in Angola. Source: https://documents1.worldbank.org/curated/en/606291556800753914/pdf/Angola-Country-Private-Sector-Diagnostic-Creating-Markets-in-Angola-Opportunities-for-Development-Through-the-Private-Sector.pdf.
- (9) Statista (2022). Fresh fruits - Angola. Source: https://fr.statista.com/outlook/cmo/food/fruits-nuts/fresh-fruits/angola.
- (10) UNCTAD (2019). National Green Export Review (NGER) of Angola. Third Training Workshop: Coffee and Tropical Fruits. Source: https://unctad.org/system/files/information-document/Coffee_and_tropical_fruits_value_chain_analysis_and_mapping%2C_report.pdf.
- (11) República de Angola Ministério da Agricultura e Florestas (2022). Relatório de Resultados da campanha agrícola. Source: https://www.ine.gov.ao/Arquivos/arquivosCarregados//Carregados/Publicacao_638096713703719191.pdf.
- (12) Watts Martin, Hutton Craig, Mata Guel Erik O., Suckall Natalie, Peh Kelvin S.-H. (2022). Impacts of climate change on tropical agroforestry systems: A systematic review for identifying future research priorities. Source: https://www.frontiersin.org/articles/10.3389/ffgc.2022.880621/full.
- (13) Zakaria, Latiffah (2023). Fusarium Species Associated with Diseases of Major Tropical Fruit Crops. Source: https://www.mdpi.com/2311-7524/9/3/322.
- (14) FAO (2023). Tropical Fruits. Source: https://www.fao.org/markets-and-trade/commodities/tropical-fruits/en/.
- (15) FAO (2021). Building responsible global value chains for the sustainable production and trade of tropical fruits. Source: https://www.fao.org/3/cb5242en/cb5242en.pdf.
- (16) World Bank (2020). Angola Poverty Assessment. Source: http://hdl.handle.net/10986/34057.
- (17) Governo (2023). Programa de Apoio à Produção, Diversificação das Exportações e Substituição das Importações. Source: https://governo.gov.ao/programa/prodesi.
- (18) Farmers Review Africa (2022). Angola has potential as a future agriculture powerhouse. Source: https://furtherafrica.com/2022/09/15/angola-has-potential-as-a-future-agriculture-powerhouse-world-bank/.
- (19) Law 10/21 of 22 April 2021. See also: UNCDTAD (2021). Amendments to the Private Investment Law. Source: https://investmentpolicy.unctad.org/investment-policy-monitor/measures/3705/amendments-to-the-private-investment-law-.
- (20) TBY (2024). Angolan Fruit Exports in 2024. Source: https://thebusinessyear.com/article/angolan-fruit-exports-in-2024/.
- (21) Silva G. (2020) Angola has remained the largest banana producer in Africa for six years. Source: https://www.verangola.net/va/en/122020/Trade/23162/Angola-has-remained-the-largest-banana-producer-in-Africa-for-six-years.htm
- (22) IFAD (2020). Angola. Source: https://www.ifad.org/en/web/operations/w/country/angola.
- (23) UN Women (2021). Angola. Source: https://data.unwomen.org/country/angola.
- (24) AIPEX (2019). Revisao nacional de exportacoes verdes de Angola. Source: https://unctad.org/system/files/non-official-document/ditc-ted-25112019-NGERangola3-aipex-3.pdf.