Tanzania's cashew board collapse — the 2018 export crisis and what came after

<p>In November 2018, John Magufuli&#x27;s government deployed the Tanzanian People&#x27;s Defence Force to confiscate roughly 220,000 tonnes of unsold cashew nuts from buyers who had refused to purchase at the government-mandated floor price of TSh 3,300 per kilogram. The army was ordered to buy the crop on behalf of the state. The result was an administrative catastrophe that exposed every weakness of Tanzania&#x27;s cashew governance architecture.</p> <p>Background: Tanzania is sub-Saharan Africa&#x27;s largest raw cashew producer, with output concentrated in Mtwara, Lindi, Ruvuma, and Pwani regions. Most processing has historically happened in India and Vietnam, which import raw nuts and re-export processed kernels. The Cashewnut Board of Tanzania (CBT) ran the Warehouse Receipt System through which all exports nominally had to pass.</p> <p>What broke in 2018 was the buyer side. World cashew prices had fallen sharply from their 2016 peak; Indian and Vietnamese buyers refused to pay TSh 3,300, offering instead around TSh 2,500. Magufuli, reading this as a Western/Indian buyer cartel, ordered the seizure. The state then had to find someone to process and export the crop. The National Service (JKT) was assigned. JKT had no cashew expertise, no foreign-buyer relationships, and no letters of credit. By late 2019, much of the seized crop had spoiled in TPDF-controlled warehouses; an estimated 40% was written off.</p> <p>The Bank of Tanzania ended up financing roughly USD 200 million in farmer payments that could not be recovered through sales. The Samia Suluhu Hassan government, after Magufuli&#x27;s death in March 2021, restructured the CBT, revised the Warehouse Receipt System to allow competitive bidding within a price floor band, and reopened relationships with Indian buyers. By 2024 production had recovered but processing capacity domestically remained marginal — the long-promised African Cashew Initiative goals of in-country value addition unmet.</p> <p>David Pilling at the Financial Times has written about how commodity boards in East Africa tend to fail not from regulatory absence but from political over-reach. Tanzania&#x27;s cashew case is a textbook example. The intended floor price was not unreasonable; the willingness to seize the crop when the price was rejected destroyed the institutional trust that makes any floor price enforceable. Magufuli&#x27;s broader lesson — that determined state action can force terms — collided with the more basic reality that nuts not sold by January are nuts rotting by April.</p>