VZCZCXRO5544
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHLU #0474/01 1351234
ZNR UUUUU ZZH
R 151234Z MAY 07
FM AMEMBASSY LUANDA
TO RUEHC/SECSTATE WASHDC 3971
INFO RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY
RUEHTN/AMCONSUL CAPE TOWN 0329
RUEHJO/AMCONSUL JOHANNESBURG 0454
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SECTION 01 OF 02 LUANDA 000474 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
JOHANNESBURG PASS TO FCS 
 
E.O. 12958: N/A 
TAGS: ECON EFIN ETRD AO
SUBJECT: ANGOLAN GOVERNMENT FOOD DISTRIBUTION SYTEM GETS 
OFF THE GROUND 
 
 
LUANDA 00000474  001.2 OF 002 
 
 
¶1. (SBU) Summary: At a program cost of nearly USD 1 billion, 
the GRA,s food distribution and retail system, PRESILD, is 
up and running with great publicity and fanfare.  Under 
PRESILD the GRA will create regional bonded warehouses, 
supermarkets in every province, open air markets in every 
municipality and even purchase bulk food commodities from 
abroad in an attempt to make more food available throughout 
the country at lower prices and under healthier conditions. 
Using foreign partners to construct and manage the markets 
initially, the GRA plans to privatize all the retail 
components by 2010.  While the first markets have brought 
lower priced and higher quality goods to the market, the cost 
of the goods is still prohibitive for even Angolans who make 
the minimum wage (USD 93 per month).  Many gaps remain on how 
the GRA will overcome the lack of roads to transport products 
efficiently and cheaply to the interior; how the spending 
will be monitored, and the level of transparency with which 
the privatization will occur.  End Summary. 
 
What is PRESILD? 
---------------- 
¶2. (U) PRESILD - The Program of Restructuring of the Logistic 
and Distribution System of basic products to the people is a 
near USD 1 billion system designed to provide distribution of 
food throughout Angola which includes three regional bonded 
warehouses, thirty-one retail supermarkets and 162 open 
market facilities ) one for each municipality in Angola. 
The aim is twofold: to ultimately enable the lower class to 
secure basic goods at a reasonable price and to develop 
outlets and the distribution system for locally-grown goods. 
In addition, the government will take on purchasing of food 
commodities from overseas in order to bring products to 
market more cheaply.  In early announcements of the project 
it was also touted as a way to &break the foreign-held 
monopoly on food distribution which has caused such high food 
costs in Angola.8  Note:  This was directly aimed at a group 
of Lebanese immigrants, who in partnership with 
well-connected Angolans, dominate the import of food stuffs 
into Angola.  The government has backed off this argument 
after the markets began opening, however.  End note. 
 
¶3. (U) The GRA has opened six retail supermarkets since March 
8, and in this first phase ending June 15, plan to inaugurate 
a total of eight Nosso Super,s (&our supermarkets8).  The 
government has developed a lavish advertising campaign for 
the PRESILD project, and inundates the two national 
television stations with commercials.  Each new Nosso Super 
is inaugurated by a high-ranking government official, with 
President dos Santos taking the honors for the first super 
market, and each opening has enjoyed wide print coverage in 
the government-owned daily newspaper. 
 
¶4. (U) Three supermarkets have been opened in Luanda, others 
are located in Lubango, Huambo and Malanje cities.  The three 
in Luanda are located in the lower class areas of the city, 
near the intended consumer.  Constructed by the Brazilian 
construction firm Odebrecht, according to a basic design and 
incorporating many pre-fab parts, the structures can be 
completed fairly quickly.  P/E Chief visited the Sambizanga 
store: about 30,000 square feet large, well-lit, clean, with 
shelves stocked with goods.  The staff of seventy, many of 
whom had been recruited from the Shoprite supermarket (a 
large South African run supermarket), was friendly and 
helpful in answering questions.  The items in the basket of 
basic goods were prominently displayed along with a price 
list.   Some locally grown fruits and vegetables were 
available as well. 
 
¶5. (U) The basket of thirteen basic items (flour, sugar, 
salt, ground manioc, ground maize, powdered milk, dried fish, 
rice, beans, palm and vegetable oils, and soap) sells for 
6,955 kwanzas, (USD 93) and is meant to provide basic foods 
for a family of six for one month.  However, these items are 
only slightly cheaper at Nosso Super than at other grocery 
stores in town, and the total cost is still very high in a 
country where the minimum wage (recently increased) is only 
USD 93 per month. 
 
Who Runs PRESILD? 
----------------- 
¶6. (SBU) Officially PRESILD is under the leadership of 
Minister of Finance Pedro de Morais, but Vice Minister of 
Commerce, Manuel da Cruz Neto, has been the hands-on leader 
of the process.  He told emboffs that the PRESILD team was 
largely pulled from various ministries including Finance, 
Commerce, Transportation, and Industry, but has no dedicated 
 
LUANDA 00000474  002.2 OF 002 
 
 
office space any only a few of its own employees.   Cruz Neto 
said that in addition to developing a food distribution and 
retail system, the government also wanted to develop local 
capacity to manage retail outlets and create employment.  He 
noted that the GRA plans to privatize the entire system by 
¶2010.  The system will include three enormous warehouses, one 
each in Luanda (Vianna); Benguela and Malanje to serve as 
central distribution points for the north, center and 
southern parts of the country.  These will begin operation in 
early 2008.  The thirty one supermarkets are currently being 
constructed and operated in partnership with foreign 
companies but will pass to Angolan ownership within three 
years, in theory allowing the Angolan owners time to train 
along side more experienced management.  Finally, the third 
phase of the project will encompass 162 open air markets ) 
one for each municipality in Angola.  These are designed to 
take the place of the informal outdoor markets which have 
grown spontaneously.  They will be equipped with electricity, 
running water, refrigeration and washable surfaces in order 
to ensure healthier standards by providing vendors with 
sanitary means of safeguarding foodstuffs.  These municipal 
markets will also include areas/shops for non-food items. 
Cruz Neto told us that the PRESILD team had conducted focus 
group sessions with current market entrepreneurs to learn 
their needs and discuss market realities such as how much 
additional rent they would be willing to pay for such basic 
amenities.  These too will be privatized once operational and 
self-sufficient by 2010. 
 
Comment: Why PRESILD? 
--------------------- 
¶7. (SBU) The GRA has devoted enormous time, energy, and 
funding into creating PRESILD.  Some critics dismiss it as a 
return to a socialized economy, while others chalk it up as a 
pre-election deliverable.  On paper it is an impressive 
project with many good intentions.  First, in a disease 
prevalent country such as Angola, providing healthy 
conditions for food storage and sales should have a great 
positive effect on the population.  Second, before the civil 
war the Planalto (interior highland) provinces were the 
breadbasket of Angola and currently produce fruit and 
vegetables which rot on shelves due to the lack of an 
internal distribution system.  By creating such a 
distribution system and retail outlets, the government can 
provide outlets for small farmers.  Five years after the end 
of civil war, the Nosso Supers are the first supermarkets to 
appear in many provincial capitals (the South African 
Shoprite group is also expanding, but only to the larger 
regional capitals.) The ultimate success of this project 
depends on two factors -- improvement of the road 
infrastructure and increased domestic agricultural 
production.  While efforts are underway to do both, it is 
unclear that they will be completed by 2010.  Without more 
inexpensive and higher quality local production, and the 
means to get it to market, it is unclear that the Nosso 
Supers and future open air markets will be able to operate 
profitably and remain stocked.  The future privatization of 
the system should also provide and excellent chance to gauge 
the extent of the Government's improvements in transparency. 
End Comment 
FERNANDEZ