Ghana stands as the world's third-largest exporter of unprocessed cashew nuts, contributing significantly to its economy with an annual revenue of approximately $300 million. Despite this impressive figure, Ghana exports more than 80% of its cashew nuts in raw, unshelled form, missing out on the potentially higher profits from ready-to-eat roasted cashews. This issue has sparked a debate among industry stakeholders and government officials about the country's approach to maximizing the benefits of its cashew industry.
Approximately 300,000 Ghanaians depend partially on cashew cultivation for their livelihoods. Ghana produces around 180,000 tonnes of cashews annually. However, the overwhelming majority of these nuts are exported to countries such as India, Thailand, and Vietnam in their raw state. The price disparity is glaring; roasted cashews fetch prices at least 4,000% higher than raw cashews sold by local farmers.
"Roasters and retailers buy the nuts from farmers for $500 a tonne, and sell to customers [both at home and abroad] for amounts between $20,000 and $40,000 a tonne." – Bright Simons
In an attempt to change this dynamic, the Ghanaian government imposed an experimental export ban on raw cashews in 2016. The aim was to encourage local processing. However, only about 20% of Ghana’s cashews are processed locally. The ban was lifted, but the challenge remains.
The high cost of credit in Ghana hinders local businesses from investing in necessary packaging and roasting machinery. Furthermore, entrepreneurs face prohibitive red tape and cronyism that stifle innovation and expansion within the industry.
Nashiru Seydou, a local farmer, expressed his frustration with the current situation:
"We are struggling. We can use the sunlight, the fertile land, to create more jobs," – Nashiru Seydou
Seydou's sentiment echoes throughout the industry as stakeholders call for a robust domestic market capable of supporting cashew processing on a larger scale. Bright Simons emphasizes the importance of increasing local consumption to bolster this industry:
"You need a lot of a Ghanaians consuming the nuts, not just a small middle class" – Bright Simons
Prof Daron Acemoglu, an expert in economic development, underscores the significant hurdles faced by local firms:
"These firms are dealing with workforces that aren't properly skilled, they have infrastructures that aren't working, they are constantly in fear of corrupt officials, or rule changes, and also it's very difficult to reach foreign markets," he says. "They need the foreign market because the domestic market is small, and their own government has very little capacity [to boost it]."
Despite these challenges, there is hope on the horizon. Entrepreneurs like Mildred Akotia are determined to transform Ghana’s cashew industry. As the founder and CEO of Akwaaba Fine Foods, Akotia is committed to increasing the volume of cashews shelled and roasted locally.
"My dream is to give a facelift to Ghanaian processed foods" – Mildred Akotia
To achieve such ambitions, Ghana must address systemic issues within its economic framework. Investment in infrastructure and skills training is crucial to creating a skilled workforce adept at processing cashews efficiently. Additionally, tackling corruption and reducing bureaucratic barriers can pave the way for more entrepreneurs to enter the market.
The government’s role in incentivizing local processing cannot be overstated. Policies aimed at reducing credit costs and providing subsidies for processing machinery could empower businesses to invest in value addition processes. Moreover, fostering a culture of local consumption through targeted marketing campaigns could gradually expand the domestic market.
Leave a Reply