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Friday, 9 November, 2001, 16:34 GMT
Mozambique mourns its cashew industry
Factory where the raw cashew nuts are processed
Far fewer cashew nuts are being processed here
By Mike Donkin in Mozambique

When World Bank delegates meet this weekend they will hope the more remote and chilly clime of their Ottawa venue will keep away the anti-globalisation protestors who have given them a torrid time at recent meetings.

However, the same issues still pre-occupy those protest groups, one of which is the way they say the World Bank makes life worse in poorer countries by insisting they open up their economies to market forces.

Mozambique is advanced as a typical case.

Processing the cashew nuts grown there used to be the country's main industry, but the protestors say World Bank insistence on "liberalising" the cashew trade has left the nut processors jobless, and the growers now struggling to survive as well.

Factory closures

The gates have rusted - like the factory behind them at just one of 13 plants in Mozambique where cashew shells were cut open and the nuts extracted and roasted.

Cashew nut factory exterior
Closed factory in Manjacaze

All shut down because the World Bank forced an end to state tariffs, which had allowed local processors to buy home-grown nuts cheaper.

40,000 jobs were lost nationwide, leaving just the odd watchman like Moses.

"These machines were what kept everyone going here. There's no other work in a poor country like ours, they were a lifeline. Look around now - and there's dust and a few pools of oil," he says.

It was a double blow - because when Mozambique's long guerrilla war ended much investment was made in big, modern plants to build a new industry.

Winners and losers

Since processing was lost, there has only been one market for cashews here, says former factory boss Carlos Borallo, and only one lot of winners.

"The Indians who own the industries in India and the exporters of raw cashews in Mozambique - because now they can buy the nuts at the prices they dictate and can export at the prices they want."

The World Bank's theory was that 'liberalising' cashew processing would give the growers a better chance to prosper.

But economist Professor Jose Negrao says that was assuming a conflict when there was none. Mozambique, he says, must make the most of one of its few natural assets.

"We have the culture of planting cashews, collecting cashews. We have the right weather, the knowledge, we have everything.

"So to export raw material from this country instead of adding value to the cashew nut doesn't seem to me at least this is the way."

Farmers suffering

Mozambique's cashew farmers don't seem to be flourishing since liberalisation either. Digging around his trees Rafael sees no improvement.

"Maybe I could make a better living if I had better tools than this old hoe and better seeds to sow," he says. "But there's been no more money coming from the nuts, less in fact. So it's not easy."

Cashew nut factory workers
40 thousand jobs have been lost nationwide

Watching the work is Patrick Nicholson, who has carried out a field study on cashews in Mozambique for the Catholic aid agency Cafod.

The problem, he claims, is that the bank works to a template, imposing set values and systems wherever it bestows cash.

"The cashew industry shows that those fixed ideas do not always work - in this case they especially haven't worked.

"The industry has been destroyed - so the World Bank needs to re-evaluate how its policies work. It cannot just rely on liberalisation as every country's solution."

Professor Negrao agrees.

"That's the worst part of globalisation - how dependent we are on these guys.

"They are not paid to go back to Washington and say 'We have doubts.'

"If they go back there and say we have doubts they will be replaced," explains Negrao.

World Bank view

The World Bank reads the story of cashews in Mozambique differently.

Country Director Jim Coates says the factories which shut down were struggling anyway, and structural adjustment always means losers as well as winners.

He does concede that the Bank perhaps failed to talk enough to those involved, but, he says, the final chapter in this saga has still to be written, and he remains optimistic.

"I'm convinced that Mozambique has a very strong comparative advantage in the production of cashew and in the processing of cashew nut kernels.

"You see new factories coming up with technologies which are simpler, more labour intensive and more competitive.

"You see a gradual process of change in the industry and I believe the industry will come alive again."

But basic and specialised processing could hardly be called a renaissance, and as the World Bank's delegates gather in Ottawa this weekend there are many here who regret the day it took a bite at reshaping Mozambique's cashew market.

See also:

29 Nov 01 | Crossing Continents
Mozambique: going nuts about the World Bank
07 Sep 01 | Country profiles
Country profile: Mozambique
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