By Whitney Akinyi
Cashew nuts are pivotal to the West African food sector, with the region responsible for 44% of the world’s cashew crop. Global cashew trade has more than doubled in the last decade, primarily driven by the Ivory Coast, which accounts for over two-thirds of that growth.
These countries supply the majority of the world’s cashews, but only 7% are processed locally, leaving significant profits untapped. The primary hurdles for these countries is scarce financing and widespread investor reluctance.
However, a groundbreaking partnership between the African Guarantee Fund (AGF) and TechnoServe is about to rewrite the narrative. Through the Prosper Cashew project, a five-year, $27 million initiative funded by the U.S. Department of Agriculture, small and medium enterprises (SMEs) in the cashew value chain will gain access to the capital they need to flourish.
The AGF and TechnoServe partnership is poised to tackle the challenges of high processing costs, limited expertise, and market knowledge head-on, and reshape the region’s cashew-nut value chain.
William Warshauer, CEO of TechnoServe, underscores the significance: “Access to affordable investment finance is a vital ingredient for transforming West Africa’s cashew-nut value chain. Our agreement with AGF will enable processors and businesses to create economic opportunities across the value chain.”
For Jules Ngankam, AGF Group CEO, this partnership represents a crucial step towards bolstering economic growth and job creation in the region: “Supporting cashew processing and manufacturing in Africa will significantly contribute to food production and economic growth. For AGF, this opportunity with TechnoServe is critical in creating economic and social impact in the region.”
The Prosper Cashew investment team has meticulously studied the financing needs in the cashew sector and the challenges facing financial service providers. Their approach includes matchmaking cashew processors with banks and impact funds while establishing a guarantee instrument to reduce investment risks.