Developing the African Cashew Industry
For the last three decades, Africa has become a well-known agricultural commodities producer with cashew nuts consistently ranking as one of the most economically important commodities. Produced by more than thirteen countries in Africa since the 18th century, the 1970s were the golden years for the African cashew industry, where domestic value-addition was at its peak. In this area, cashew processing reached over 200,000 MT due to contributions by Mozambique based mega processing facilities mostly owned by Anglo-Americans. However, increased political instabilities across the African continent as well as the enforcement of unfavorable trade policies, which were adapted by local governments upon World Bank advice, have factored into the decline of this industrial movement, causing major damage to the confidence of cashew investors in Africa. While Africa has continued to increase its production of raw cashew nuts, processing has stagnated far below that of the more industrialized economies in Vietnam, India, and Brazil. The loss of this value addition is significant, as it is estimated that a 25% increase in RCN processing within African would generate more than $130 million in household income and substantially improve the lives of many families in rural areas.
In the past ten years, the public and private sectors alike have recognized the strategic value of this crop. In 2004, the African cashew industry began to awake from its dormancy and started revamping its growth through private entrepreneurs, as well as USAID and TechnoServe support programs. The founding of the African Cashew Alliance (ACA) in 2006 was motivated by the desire to mobilize and further strengthen African cashew stakeholders through private sector and public donor initiatives. This was indeed a historic moment for the African agri-business industry. With the vision of seeing a globally competitive African cashew industry that benefits the entire value chain, from farmer to consumer, ACA seeks to increase cashew processing within Africa and improve competitiveness and sustainability through facilitating public-private cooperation with improved business environment. Since the founding of ACA, the African cashew industry has taken significant strides, both in RCN production and processing together with mobilized and organized African Cashew value-chain.
West Africa has become visible with increased cashew production, particularly Cote d’Ivoire, which now produces over 700,000 MT and is the world leader in RCN production. The region learned a great deal from Mozambique, Kenya, and Tanzania in boosting their raw seed production and in growing the domestic processing industry. The ACA Secretariat has been actively promoting the tremendous investment opportunities available to local and foreign investors. Increased visibility and investment has resulted in a clear increase in both production and processing volumes in Africa. In 2016, the Alliance monitored 1.67 million MT of domestic cashew production with 110,000 MT of processed kernels and more than 278,000 MT in total installed capacity. The Alliance continues to encourage production and processing enhancement by directly engaging with cashew stakeholders via various public and private project initiatives, technical, business advisory assistance, and market information services. Despite widespread difficulties in RCN procurement throughout 2016, the strategic importance of value addition within Africa continues to be recognized. In promoting processing, targets for 2020 have been set for over 1.6 million MT of stable production and increased processing volumes of up to 300,000 MT. These targets are equally shared by cashew producing countries, private investors, and government agencies, as well as public donors.
From 2014 and up until the most recent cashew harvest season, challenges have continued to present themselves as a step backwards for the cashew investors in Africa. Price speculations, with growing external competition for raw seed, have slowed the growth of this nascent industry by reducing processing volumes to 27,000 MT and stagnating new investments in 2016. Therefore, the Alliance has been actively advising African lawmakers and policy implementers to develop a business environment conducive to growth, with industry incentive schemes ripe for sustainable industrial development. Recent advocacy efforts resulted in positive industrial policy changes, especially in Cote d’Ivoire and Benin Republic, where governments have introduced processing encouragement plans. Some of these policies include special buying windows, increased RCN export levies, no taxes on kernel exports, three to five year tax holidays for investors, and kernel export enhancement grants and bonuses. The Alliance is also advising ECOWAS countries in West Africa to further collaborate in facilitating cross-border cashew trade in order to grow together as group economies, learn from each other’s strengths, and to explore hidden trade opportunities.
Each year, the Alliance organizes the world’s largest cashew convention, the ACA World Cashew Festival & Expo, which serves as a major effort to engage new investors and technological innovators with local cashew stakeholders in Africa. The Alliance gladly invites all members and global cashew stakeholders to participate in our upcoming “World Cashew Festival & Expo 2016”, which will be held in Cotonou, Benin Republic from 18th-22nd September 2017. Furthermore, the Alliance continues to engage direct stakeholders via industry awareness campaigns, training, and advisory programs on technology trends, economic feasibility studies, market information services, food safety & quality assurance assistance, and promotion of local consumption. Increased development in the next few years has the potential to assure the visible and sustainable growth of the African cashew industry on a global scale. The African Cashew Alliance continues to work hard to achieve this ultimate goal and to build long-term economic stability within Africa.
