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Where cashew is king, it fails to rule the economy

Mozambique struggles to regain global reach for its nut.

By Correspondent / July 24, 2008

Xai Xai, Mozambique

The drive to this port city where the Limpopo River meets the Indian Ocean is lined with cashews.

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First come the vendors with their cashew-filled buckets, waving at cars with the tin mugs used to scoop $2 portions. Then, the women who sit behind wide reed baskets piled with the nut – they’re quiet and calm from a distance, but ready to pounce on any car that stops, crowding, insisting upon their products’ superiority.

Closer to town are the large branches stuck vertically into the dusty ground, draped with bags of cashews and looking like some sort of modern art Christmas trees. Sellers wave at passing cars; young boys plead with drivers to buy.
Along this road, it seems, cashew is king. But in a nation that once was the world’s largest cashew producer, the king is a mere shadow of its former self.

On the other side of this bustling city of faded Portuguese buildings, Derek Higgo sits in the empty boardroom of his Mocita cashew processing factory and sighs: “Everything you see on the road there – it’s subsistence. It’s actually quite a sad situation.”

Ten years ago, Mocita was the largest employer in Xai Xai, with 1,500 workers processing thousands of tons of cashews a year – part of a nationwide effort to regain Mozambique’s dominance in the cashew industry.
But today, Mocita is quiet – a model not of economic resurgence, says Mr. Higgo and many others, but of international development gone wrong.

The story of the cashew is, in many ways, the story of modern Mozambique and many other developing countries. It is a tale of colonialism, commerce, and war, and of the perils – and potential – of aid.

It is a contested story, and, in Mozambique, still a highly emotional one. But what is clear, regardless of one’s position, is that the legacy of the cashew looms large.

• • •

The cashew itself is an ornery nut to crack.

Its kernel grows on the green, shady cashew trees cultivated along Mozambique’s 1,500-mile coastline. It is encased in a hard shell so acidic that it can burn through fabric and damage skin. Getting to the tasty part is no easy task.

One method is to heat the cashews in a tin over a fire until the cashew oil ignites and the shells split – that’s the preferred method of most subsistence cashew sellers. Another way is to freeze the nuts in liquid nitrogen and crack them. The Mocita factory heated the nuts in a 195 degree Celsius oven, spun them in a centrifuge, dried them, and blew off the remaining shells with compressed air. These days, inexpensive hand processing is back in favor.

Mozambique was the world’s top cashew producer when it won independence from Portugal in 1975. More than a dozen large factories using mechanical processes to remove the kernel turned out 150,000 to 200,000 tons annually.

But civil war soon engulfed the country and decimated the industry. By the time of the country’s peace agreement in 1992, the ruling government was courting private investors in hope of reviving the cashew economy. It had also planned a massive cashew tree-planting campaign (kernel yield decreases as cashew trees age) and put a high tax on cashew exports to encourage local processing.

“It made enormous sense from the country’s point of view to invest in cashews,” says Higgo. “Cashew trees were growing. The population knew what to do. It was a dollar-earning export.”

And businesses like his were keen to get a piece of the action. The Anglo American Corporation had operated Mocita from the 1960s through the early 1980s, when the war made it impossible to continue. After the peace accord, Higgo says, the company was eager to return. It spent millions of dollars to revamp the factory, which Higgo and other investors later bought, and started producing cashews.

But in 1995 the World Bank changed the playing field. The Bank, which was heavily involved with Mozambique’s rehabilitation and in control of much of the government’s access to aid money, decided that it would be more beneficial to Mozambique to export raw cashews without processing. This decision fitted in with the Bank’s inclinations toward economic liberalization, bolstered by a sense that the large, often foreign-owed, cashew factories here were exploiting Mozambican workers.