Cashew nuts are an important export crop for many African countries. The favourable climate and soil conditions across the continent have made Africa a major producer and exporter of raw cashew nuts for processing globally.

Production

Ivory Coast is the largest cashew producer in Africa, accounting for over 40% of the continent’s total output. Other major producers include Nigeria, Tanzania, Benin, Guinea-Bissau and Mozambique.
Africa as a whole produce around 2.4 million metric tonnes of raw cashews per year, accounting for over 60% of global production.
In recent years, cashew production in Africa has been growing at an average rate of 7% annually due to expanding planted area, improved yield and higher prices.

Processing

Most African countries mainly export raw cashew nuts and import processed kernels for local consumption. Only a small fraction of total production is processed domestically.
India is the main destination for African cashew exports, importing over 75% of raw nuts for processing and re-export of value-added kernels.
However, initiatives are underway in various countries to expand local cashew processing capacity. This includes public-private partnerships and special economic zones for cashew processing.
With adequate investment, Africa has the potential to capture a larger share of the growing global market for cashew kernels – currently dominated by Asian producers.

Export Trends

Africa’s cashew exports have increased significantly in recent years, reaching over $4 billion annually. Ivory Coast and Tanzania dominate African cashew exports.
India remains the largest market for African cashew exports due to its massive kernel processing industry, but exports to the EU and the US are growing steadily.
Under the AfCFTA, intra-African trade in cashew is expected to increase as cross-border investments in processing capacity expand within the continent.
Raw cashew export volumes are projected to grow by over 4% annually in the coming years due to rising production and expansion of planted areas across Africa.

Potential under AfCFTA

The AfCFTA is expected to create larger markets, economies of scale and investment opportunities for Africa’s cashew sector by removing tariff and non-tariff barriers to intra-African trade.
There are opportunities for countries to specialise in various segments of the cashew value chain – from production to processing to marketing. The value will be retained within Africa.
Investments in cashew processing plants, R&D centres, packaging and logistics are expected to increase under the AfCFTA to meet the demand of the expanded continental market.
With adequate financial and technical support, Africa’s cashew sector could thrive and generate more jobs and economic value for countries through regional integration under the AfCFTA.

Africa’s cashew production and exports have grown significantly in recent years. However, potential remains untapped in processing and adding value within Africa. The AfCFTA creates an enabling environment for investments that can develop regional value chains and specialised clusters – propelling Africa’s cashew sector forward.

African countries and regions that are showing significant growth potential in the cashew sector

West Africa

Ivory Coast – As the largest producer and exporter of cashews in Africa, Ivory Coast has a well-established cashew industry. The government is now looking to expand processing capacity by attracting investors under its Cashew subsector Development Plan.
Nigeria – Nigeria overtook India as the second-largest cashew producer in the world recently. The government has announced policies to expand processing, create jobs and export more value-added cashew products.
Guinea-Bissau – Once a minor producer, Guinea-Bissau has transformed into the fourth-largest African cashew producer in just a few decades. The government is now focusing on expanding the processing sector.
Benin – While a smaller producer, Benin has become a major exporter of cashew kernels from Africa due to investments in processing. The government supports the sector through incentives for investors.

East Africa

Tanzania – Tanzania is the largest cashew producer in East Africa and the second largest exporter of raw nuts from Africa after Ivory Coast. The government has launched initiatives to promote investment in cashew processing.
Mozambique – Mozambique has seen rapid growth in cashew production in recent years and now aims to develop a larger processing sector to add more value and jobs to the economy.
Kenya – Kenya has seen a surge in cashew production recently due to favourable prices. The government has begun to prioritise the sector and promote investments in processing facilities.
Ethiopia – Ethiopia produces mainly for domestic consumption currently. But the government has launched programmes to commercially develop the cashew subsector and promote the processing and export of value-added products.

While most African countries focus on producing and exporting raw cashew nuts, there are select nations showing the potential to transform their cashew industries by attracting investments in processing and value addition. These countries are poised to capture a larger share of the growing global and AfCFTA markets for cashew kernels in the future.

Initiatives launched by Tanzania to promote investment in cashew processing

Cashew Nut Board of Tanzania – The Cashew Nut Board was established in 2009 to develop and promote the cashew industry in Tanzania. The board acts as a one-stop centre to facilitate investments in cashew processing. It provides regulatory oversight and policy recommendations.
Cashew Nut Expansion Strategy – The government launched a Cashew Nut Expansion Strategy in 2017 with the goal of significantly increasing the processing of cashews within Tanzania. It aims to raise the amount of processed nuts from 10% currently to 50% by 2025.
Cashew Processing Zones – The government has designated three Cashew Processing Zones for industrial-scale cashew processing – at Tunduru in the Ruvuma region, Mtwara and Lindi regions. Investors get benefits like tax exemptions in these zones.
Investment Incentives – The government offers a package of fiscal incentives for investors in cashew processing, including import duty exemptions, tax holidays and capital allowances. The aim is to attract large-scale investments.
Public-Private Partnerships – Tanzania is promoting joint ventures and contract farming arrangements between local farmers and investors to ensure the supply of raw nuts for processing plants. The Cashew Nut Board acts as a facilitator.
R&D and Training Centres – The government is establishing Cashew Research and Training Centres to develop high-yielding and disease-resistant varieties, farm management protocols and training programmes for farmers.
Linkages to Regional and Global Markets – Tanzania is leveraging its membership in regional economic blocs like the East African Community and SADC as well as the AfCFTA to access larger markets for its value-added cashew products.

Tanzania has launched a comprehensive strategy involving investment promotion, processing zones, incentives, public-private partnerships, R&D and market linkages to attract investments and develop a larger cashew processing subsector that can generate more income and jobs from the cashew value chain.

Hope this detailed blog post covers all relevant aspects and provides a useful overview of cashew production, export trends and potential under AfCFTA across Africa!

by Research Desk