In a bid to stem the flow of fx out of the country, the Angolan government has banned the import of some consumer packaged goods in consumer pack sizes. Executive Decree No. 63/21 establishes new rules meaning some core products must be imported in bulk and packaged in Angola. The ban comes into place on the 17th June 2021.
The decree can be read here (Portuguese). The ban affects pre-packaged imports of the following products:
- Wheat flour
- Corn flour
- Milk powder
- Edible oils
- Animal feed (it is unclear if this also refers to dry pet food)
- Coarse and refined salt
Canned fruit and vegetables, powdered detergents and tomato paste will be banned in pre-packed sizes from Jan 1st 2022 onwards.
The decree also provides exceptions for the import in small packages of rice (1kg-5kg), wheat and corn flour (1kg), beans (1kg), canned fruit and vegetables (less than or equal to 1kg), sugar (1kg), powdered milk (1kg and 2.2kg), cooking oil (1 litre) and salt (less than or equal to 1kg).
The ban will inevitably stimulate co-packing and local manufacturing in Angola. Distributors Trendtype have spoken to in the past 12 months have repeatedly warned that import bans were coming, and have started to increase local production of products such as pasta, margarine, mayonnaise, biscuits and canned food.
The disruption to the value chain, effectively putting the thumb on the scales in favour of Angolan businesses will prove disruptive for the many South African, European, Brazilian and Indian brands looking to build a presence in Angola. It will also disrupt Shoprite, which relies heavily on its South African supply chain to service its Angolan store network.
The move has been prompted by the long term low oil prices, made more acute by the impact in 2020 of a sharp drop in oil prices as oil consumption fell because of the COVID-19 pandemic. We expect to see Nigeria enact more import bans for the same reason – it provides a win-win in that it protects fx, drives some local investment in packing or manufacturing, and also provides considerable opportunities for local entrepreneurs to provide co-packing services.