Africa

Smuggling devours Ivorian cashew revenue

IRIN News

About a third of Côte d'Ivoire's cashew nuts are smuggled abroad every year, robbing the country of a valuable income stream.

Côte d'Ivoire is the world's second largest cashew nut exporter. (Alexis Adele/IRIN)

"More than 100 000 tonnes of cashew nuts are illegally exported every year," said Siaka Coulibaly, the chief of staff at the ministry of agriculture. 

It is estimated that 150 000 tonnes of cashew nuts were smuggled through the northern and eastern borders of the country in 2011, representing a US$130-million loss to the national economy and a $3-million state fiscal revenue loss, a UN expert panel said in an April 2013 report.

Former New Forces rebels in the current administration of President Alassane Ouattara are part of a "military-economic" network smuggling cocoa, cotton, cashew nuts and other natural resources mainly to Ghana, said the report.

“The network also systematically impedes proper control and interdiction of smuggled goods by the recently redeployed state authorities such as the police, the gendarmerie, the customs authorities and the water and forestry police,” it said.

Production boom 
Cashew nut production has grown steadily in the past decade to become the country’s third export produce after cocoa and coffee. Côte d'Ivoire is the world’s second largest cashew nut exporter. This year’s output is estimated to be 480 000 tonnes, 50 000 tonnes more than in 2012, according to the Cotton and Cashew nut Regulatory Authority (Areca).

Cashews are mainly grown in Côte d’Ivoire’s north and northeast where they were introduced in the 1960s to counter desertification. Production rose from 75 000 tonnes in 2002 to 430 000 tonnes in 2012, said Kassoum Bamba, an economist in the commercial capital Abidjan.

“In 10 years cashew nut production has risen massively and it could become the [country’s] top export earner in the near future,” Bamba told IRIN.

Some 250 000 farmers grow cashews and the sector employs 2.5-million people directly and indirectly. About 98% of the crop is exported to India. In 2012 it earned Côte d'Ivoire $292-million, according to Areca.

Farmers said smuggling is driven by better prices in Ghana.

Ghanaian markets
"The fixed benchmark prices are often adhered to for about two weeks after which the buyers offer lower prices. We are therefore forced to turn to Ghanaian markets. We sell to whoever offers the best price," said Salomon Kobenan, a farmer in Côte d'Ivoire's eastern Tabagne area.

The product is smuggled by road. “There are also back roads through the villages to avoid police check-points,” said farmer David Kessia.

In Ghana "buyers pay [the equivalent of] the Côte d'Ivoire benchmark prices. Some farmers smuggle out the cashews in food transport trucks," explained Bernard Kouamé, another cashew producer.

The government, in consultation with members of the cashew sector, has set benchmark prices at 200 CFA francs (four US cents) per kilo, down from 310 CFA francs last year.

The agriculture ministry's Coulibaly said: "For the current harvesting season [May-June] all producers have been warned [against smuggling] and road inspections have been set up. If the producers collude to fraudulently export cashew nuts, we will all lose because it’s the taxes that enable the government to initiate development."

Weak processing 
Less than 1% of Côte d'Ivoire's cashews are processed locally, although the country has six main cashew nut processing factories able to handle 50 000 tonnes of raw nuts, or 11% of the total harvest.

“Lack of processing is one of the main hurdles to better earnings for farmers and developing the sector. The factories have a very low processing capacity,” said economist Bamba.

Henriette Kobenan, who heads a 150-strong women’s group in eastern Côte d'Ivoire, said they processed 50 tonnes of cashew nuts in 2012, earning them $2 350. The group hopes to double its processing capacity this year.

"It's quite a small amount, but we have seen some progress in recent years … which has improved our earnings, but we need to do more,” Kobenan said. Cashew processing involves shelling the nuts for export and sometimes roasting them for domestic consumption. – IRIN

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