Businessafrica.net Newsletter ISSN 1563-4108
Dr. QUENUM & ASSOCIATES
INVESTMENT AND BUSINESS PLANNERS

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THE COLLAPSE OF MOZAMBIQUE'S
CASHEW NUT INDUSTRY

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Achetez Africains, Refusez de Rester Pauvres!
WHICH ENTITY IS RESPONSIBLE?
ARE THE IMF AND WORLD BANK THE GUILTY ONES?
ARE MOZAMBIQUE'S AUTHORITIES TO BE BLAMED TOO?
OR IS IT JUST A PLAIN FAILURE IN
THE
DECISION MAKING PROCESS PERFORMED BY
THE
PROCESSING UNITS' MANAGEMENT STAFF?

© Copyright Dr. B.M. QUENUM All rights reserved - May 15, 2001
SYNOPSIS


In an article dated October 1997 entitled "Can Mozambique Make the World Bank Pay for Its Mistakes?" Joseph Hanlon wrote:

"At the World Bank insistence, these state-owned (cashew nut processing) factories were privatized in 1994-5. High bidders at US$ 9 million for the cashew factories were local businesses and not transnational corporations, as had been expected by the World Bank and many outside observers.

But as soon as the local business people took over, the World Bank revealed a secret study, which claimed the processing industry was so inefficient that the country lost money on every nut processed, and that peasants would earn a higher price for their cashew if raw nuts were exported. .."

And Mozambique started exporting raw cashew nut to India; action which deprieves its own processing units from access to the raw material. [Click following link for "Briefing on cashew policy" published by the World Bank on November 13, 2000]

Then, following raw nut scarcity, Mozambique's cashew industry is now facing the complete collapse of the processing operations. All 14 running processing units progressively closed shops. The last one closed down beginning April 2001.

To salvage the industry, which is the second provider of hard currency to the national budget, the government of Mozambique slapped - end of April 2001 - an embargo on the export of raw cashew nuts to India. Click here for more.

- Following the collapse of Mozambique's cashew industry - resulting from the recommendations made to Mozambique's authorities, by the IMF and the World Bank, to export raw cashew nut instead of finished processed products - the international media published articles and reports to blaming the disaster on the IMF and the World Bank.

Are they the only ones to blame? Or are they the perfect scapegoats? Sure, the arrogant attitude shown by the IMF and the World Bank's experts imposing Structural Adjustment Program (SAP) to African countries is now a well-known fact in Non Governmental Organizations' Circles.

However, one should further consider the matter to dig out the true economic reality behind the collapse of Mozambique cashew nut industry; and not to focus attention only on the wrong recommendations to Mozambique made by the IMF and the World bank's experts.

For sure, the knowledge of the true causes behind the closing down of many industrial operations throughout the continent would help Africa's authorities improve the performance of their economy and reverse the current trend of making wrong economic decisions under the IMF and the World Bank's pressure. That knowledge will be a guideline to making alternative propositions and plans to the IMF and the World Bank's controversial economic restructuration programs and stop blindly accepting their dictums.

- The analysis of the cashew nut industry carried out in this delivery leads to the conclusion the IMF and the World Bank, Mozambique's government and the cashew nut processing units' management are co-responsible for the collapse of the cashew nut industry in Mozambique. However, Mozambique's cashew nut processing units' management is more accountable for the disaster

1. CASHEW NUT ON THE WORLD MARKETPLACECashew nut on the world marketplace
2.CASE STUDY
EVALUATION OF A FEASIBILITY STUDY
ON THE TRANSITION FROM RAW NUT SELLING
TO FINISHED PRODUCTS MARKETING
Feasibility Study's evaluation
3. TO SURVIVE AND THRIVE IN THE CUTTHROAT COMPETITION
OF THE GLOBAL MARKETPLACE, A COMPANY NEEDS
A GOOD FINANCIAL MANAGER
Cashew nut industry management

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