Tanzania is on its feet with a huge stock of cashew nuts struggling to get a market, days after kicking out a controversial Kenyan firm from its cashew nuts investors’ circle.
Little known Kenyan firm Indo Power Solutions signed an agreement with Tanzania government to buy 100,000 tonnes of cashew nut worth $180.2 Million equivalent to Ksh 418 Billion. But when the company failed to implement provisions of the contract on time that entailed finalizing important legal procedures, it was cut short.
Magufuli’s government is now on a hunting spree for investors in cashew nut processing. Geoffrey Mwambe, Tanzania Investment Centre (TIC) executive director said they are seeking to establish cashew nut processing projects and industrial parks mainly in Lindi and Mtwara regions.
The centre has organised a forum next month whose key aim is to attract domestic and international investors in the cashew nut sector, which is experiencing quick annually. This decision comes at a time when the government is still holding a huge stock of cashew nuts estimated at 200,000 tonnes it bought from farmers in November last year after private buyers failed to meet the prices as demanded by President John Pombe Magufuli.
Owing to the low processing capacity of cashew nuts, about 90 per cent of the cashew nuts are exported in their raw form. Tanzania ranks among the world’s largest producers of raw cashew nuts. It is now looking for investors for new cashew nut plantations to increase productivity, suppliers of machinery equipment spare parts and to put up industrial parks and processing zones. Also, investors who can add value on the nuts and produce various products like cashew cheese or butter, lubricants, waterproofing and paints.
Indo Power solutions lost on the deal after Tanzania expressed fear whether the Kenyan firm would have the capacity to fulfil the deal, with concerns that it could have acted as a broker for a third party, following public questions about its registration and capacity, and the authenticity of the officials behind the lucrative deal.