Companies in Angola “caught off guard” by kwanza devaluation admit difficulties and review strategies

The devaluation of Angola’s kwanza currency has caused significant challenges for companies operating there.

With a 60% devaluation since the start of the year, businesses like Novagrolider, a large agro-industrial project employing 4,000 people, are feeling the negative effects.

Novagrolider relies on imported production factors and has many expatriate workers, intensifying the impact.

Novagrolider’s financial director admits that the devaluation has led to investment freezes and may result in job reductions.

As an exporter, the devaluation also affects their product prices, potentially worsening poverty and unemployment.

Refriango, a major beverage company, is similarly reevaluating its strategies in response to the unexpected currency devaluation, actively seeking measures to minimize the negative impacts and adapt.

António Leal, the general director of Score Distribuição, owner of Deskontão supermarkets, agrees with the difficulties faced by companies.

Negative exchange rate differences resulting from completed transactions with imported goods have significantly impacted their treasury.

Rising product prices have also reduced consumption.

The company is implementing containment measures, reducing imports, and cutting costs to mitigate these challenges.

The devaluation of the kwanza and subsequent inflation increase has caused BMI consulting firm to revise their growth forecast for Angola.

They now anticipate a 0.7% contraction in real GDP for 2023, down from the previous forecast of 1.8%.

The devaluation’s impact on household consumption, business investment, and the downturn in the oil sector all contribute to this downward revision.

The National Bank of Angola has rescheduled a Monetary Policy Committee meeting to analyze evolving macroeconomic indicators, money markets, and foreign exchange markets.

The reasons for the change were not disclosed.