A number of stakeholders reacted to President John Magufuli’s order that the government would buy cashew nuts from farmers with the Tanzania Agriculture Development Bank (TADB) acting managing director, Mr Japhet Justine, saying the matter was within its capability.
President Magufuli said yesterday that TABD should purchase cashew nuts from farmers at Sh3,300 per kilogram, far beyond what farmers were asking for as they were responding to falling global prices of the cash crop.
Speaking to The Citizen yesterday, Mr Justine said that the directive issued by the president was within the bank’s ability and that the state-owned lender was ready to work on it and ensure that the farmers were paid on time.
“As a bank, we know all regulations and sources available to obtain fund. We will ensure that we work on those grounds when the appropriate time comes. We will issue a statement on the way forward,” he said.
However, that did not go down well with the ACT Wazalendo party leader, Mr Zitto Kabwe, who said in its current state, TADB does not have the money to buy all the cashew nuts, saying if the lender spends all the funds it has, it can only manage to buy 30 per cent of this year’s harvest.
The bank’s liquid capital, according to Zitto, is about Sh200 billion, but the amount required to purchase the 200,000 tonnes is about Sh660 billion.
“Does the government intend to borrow from the farmers? If not the government should ensure that all regulations are adhered to if they are to provide funding to TADB. We will make a follow up to ensure that the government does not use public fund for its own benefits,” he stated.
Mr Kabwe said the government has taken the best option in dealing with the cashew nuts challenge, noting, however, that the decision will significantly reduce the country’s foreign exchange earnings this year.
“A lot of Tanzanians will also be affected because the value chain will be disrupted,” he said, naming transporters, hotel owners, shipping brokers as well as warehouse owners as some of those who will be affected.