Import tariffs strain rich-poor gap in 'madly expensive' Luanda

Wed Apr 23, 2014 3:29am EDT
 
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By Shrikesh Laxmidas

LUANDA (Reuters) - In Luanda's Jumbo supermarket, a half-liter tub of imported vanilla ice-cream used to cost $25, testament to the Angolan capital's rank as one of the world's most expensive cities.

With new import tariffs imposed last month, that price has jumped to $31, enough to make even wealthy locals and expatriates pause and putting it even further beyond the reach of millions of poor Angolans struggling to feed their families.

Luanda already ranks as the world's most expensive city for expats, with the presence of thousands of foreign workers, many involved in the oil industry, helping to drive up prices.

Sub-Saharan Africa's second largest oil producer, still rebuilding after emerged in 2002 from a 27-year civil war, imports three quarters of the goods it consumes.

The government of President Jose Eduardo dos Santos, who has ruled since 1979, imposed higher import tariffs last month on hundreds of items, from garlic to cars. The stated aim is to try to diversify the heavily oil-dependent economy and nurture farming and industry, sectors which have remained weak.

But this is expected to hike prices for consumers, hitting the less privileged sectors of society especially hard. The Angolan president, one of Africa's longest-ruling leaders, has been accused by critics of widening a dangerous gap between the rich and the poor that risks causing social unrest.

"Things were already hard and this will make it even tougher," said Jessy Andrade, 32, a mother of four shopping at Jumbo. She pointed to the meager contents of her bag before going back to her occupation as a street-corner currency trader.

Some staples - flour, beans, rice, palm oil, sugar, powdered milk and soap - will be exempt from the tariffs.   Continued...

 
A woman holding a child sits in front of her stall in Sambizanga informal settlement, outside the capital Luanda in this August 28, 2012 file photo. REUTERS/Siphiwe Sibeko/Files