Lagos, Nigeria – As South Africa reaps the benefits of a timely drop in fuel prices during a critical harvest season, Angola and Nigeria find themselves struggling under the weight of persistent fuel cost burdens and structural inefficiencies—losing competitive ground in the agricultural sector.
AfricaHeadline Reports Team
editorial@africaheadline.com
South African farmers are breathing a sigh of relief. A combination of lower global fuel prices and favourable domestic policy adjustments led to a cut of 22 cents/litre for petrol and up to 42 cents/litre for diesel in early May. For a country where fuel accounts for 11–13% of grain production costs, according to Wandile Sihlobo, Chief Economist at the Agricultural Business Chamber of South Africa, this is a significant win.
Crops like grains, citrus, and oilseeds, which rely heavily on road transport due to an ailing rail system, now face reduced logistics costs. This is expected to further ease food price inflation, already down to 2.7% in March, a much lower figure than in most African economies.
Moreover, soybean and sunflower prices dropped by nearly 10%, reflecting improved production outlooks and strengthening the case for stable food prices heading into mid-year.
By contrast, Nigeria continues to struggle with high fuel costs and limited domestic refining capacity. The government’s abrupt removal of fuel subsidies in 2023, without fully operational local refineries like the Dangote complex, has led to severe inflationary pressures. Despite its oil wealth, Nigeria imports almost all of its refined fuel, exposing its economy—and farmers—to volatile international prices.
Rural transport costs remain high, eroding profit margins and discouraging large-scale mechanized farming. Nigeria’s food inflation remained above 30% in early 2025, worsening food insecurity for millions.
In Angola, the fuel subsidy reform implemented since 2023 also continues to bite. While the government aims to align domestic prices with global benchmarks, farmers—especially those outside Luanda—face rising transport and input costs. Limited rural road infrastructure and a weak agro-logistics base amplify the effect, with many producers forced to cut production or pass costs onto consumers.
The result: basic food prices remain high, and Angola’s inflation rate remains stubborn, despite macroeconomic stabilization efforts. Unlike South Africa, there has been no significant relief in fuel prices to cushion the peak harvest and transport season.
South Africa’s edge lies in timing, infrastructure, and policy coordination. The government’s decision not to raise VAT, paired with a strengthening rand in March, offered breathing room to households and businesses alike. Lower fuel prices coincide with harvest season, boosting the competitiveness of exports like citrus, grains, and oilseeds.
In comparison, Angola and Nigeria remain hamstrung by policy inconsistencies, infrastructure deficits, and over-reliance on imports, particularly in fuel.
While South African consumers may still face inflationary risks from global volatility and political uncertainty ahead of the national elections, their current advantage in fuel-linked agricultural dynamics is clear.
Angola and Nigeria, unless they accelerate investment in refining capacity, rural logistics, and agricultural subsidies, risk further falling behind in ensuring food security and competitiveness in the regional agricultural market.
