USAID Joins Private Sector to Boost Guinea-Bissau Cashew Revenues

BISSAU, June 28, 2005 – The United States Government, through its Agency for International Development (USAID), is investing a further $300,000 in Global Development Alliance (GDA) funding to work with the private sector to bolster Guinea-Bissau’s cashew production through training in quality control and marketing.

Currently, cashew nuts account for 98 percent of Guinea-Bissau’s export earnings. At an average of 110,000 metric tons per year, Guinea-Bissau is the world’s fifth largest cashew producer and West Africa’s largest producer of raw cashew nuts.

USAID first supported the country’s cashew industry – by far Guinea-Bissau’s largest source of export revenue — in 1994. Over the past 3 ½ years of USAID intervention, the number of business services supporting the sector increased to 457 and cashew processing enterprises, which now employ 800 people, expanded by nearly 350 percent. Kernel exports totaled $735,000 as a result of strengthened links to domestic, regional, and international markets.

USAID, through its implementing partner, EnterpriseWorks, will continue to work to improve private sector participation in expanding processing for export, using low-cost, locally-manufactured machines. Over the next 12 months, USAID will focus on improving enterprise productivity and product quality, improving business methods, facilitating credit, and ensuring a steady flow of nuts to meet market demands by encouraging small and larger cashew processors to collaborate.

As part of the new assistance program, USAID will strengthen the local processing enterprise association (ATC-Cajú) and work to create an African Cashew Alliance to bolster regional and international trade.

The private sector is expected to contribute more than $2.5 million to cover costs of processing unit construction and expansion, raw nuts and employee wages. These funds will also go to pay local manufacturers of cashew processing equipment.

By the end of the year, USAID expects that 1,200 people will work at processing enterprises or in some way support the cashew industry, such as equipment manufacturers, unit owners, processing employees, warehouse personnel, kernel packagers and wholesalers and kernel brokers. Revenues from shelled cashews are expected to reach $1.5 million and manufacturers are to sell over $14,000 worth of processing equipment.

Raw cashew nuts from Guinea-Bissau are worth $650 per ton as of the April-June 2004 harvest. The country exported 92,000 tons in 2004, earning $60 million, according to the Ministry of Commerce. Since prices averaged 250 F CFA per kilogram, or $0.45/kg at the time of harvest, this means that cashews pumped nearly $42 million directly into rural households in 2004. Through processing, $650 worth of raw nuts yielded approximately $1,320 worth of finished cashew kernels in 2004.

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