The cashew industry was abruptly shut down by the World Bank in 1996, putting 10,000 women out of work and ending an important export. Suddenly that grim tale is back in the news. Ex IMF man José Sulemanesays Mozambique should have refused and economist Roberto Tibana has found a World Bank ulterior motive.
José Sulemane was a national director in the Mozambique Ministry of Planning 2000-2005 and then spent 20 years in the IMF. In a talk at Universidade Pedagógica in Maputo (31 August 2026, O Pais 1 Sept) he demonstrated the IMF skill of telling Mozambique what it should have done. But as is so often the case, certain relevant facts are forgotten or never known.
O Pais reports ‘For Sulemane, dependence on external funding can lead governments to accept certain proposals without properly assessing their economic and social consequences. … As an example, the economist referred to the reforms in the cashew nut sector, arguing that, at the time [1995], there had been a lack of sufficiently in-depth national analysis of the effects of the proposed measures. “We forgot that it employed at least 30,000 people, if I am not mistaken, at the time,” he said. The economist considered that the case demonstrates the importance of the State carrying out prior studies to understand the consequences of a given policy, particularly when sectors with a significant impact on the economy and employment are at stake.’
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What actually happened was that Mozambique had a successful cashew industry and had a good plan for expansion, which the World Bank totally opposed. Mozambique did not forget the workers, and stressed them to the Bank in negotiations. The Country Assistance Strategy contained several ‘necessary conditions’ – a phase never used before or since. If they were not accepted, the World Bank would not have a Mozambique plan and all aid would stop. ‘Your children will starve’, Mozambican ministers were reminded. Two of the conditions were destruction of the cashew industry and the disastrous privatisation of two banks.
Just to remind Dr Sulemane, Mozambique did ‘properly assess the economic and social consequences’ of the World Bank’s cashew demand. But it also assessed the cost – the end of a World Bank programme and all aid. Perhaps Mozambique could have refused, but in 1995 it was a newly elected government and this was its first big negotiation. With his two decades of IMF experience Sulemane knows now that the World Bank would have had to back down and withdraw the ‘necessary conditions’. But cashew remains one of the best examples of the unchecked power of the Bretton Woods Institutions. (See Do bicycles equal development in Mozambique? (2008) free only in Portuguese.)
At the Sulemane talk were three key figures present at the time, Roberto Tibana, Tomaz Salomão and Abdul Carimo, who painted a different picture (MediaFax 3 September 2026). ‘The problem does not end with our technical ability to negotiate,’ Tibana said. The problem ‘begins with the asymmetrical power that international institutions hold over countries’.
‘What happened was that the World Bank lent money to India to develop the cashew industry, starting with the farms and moving on to the factories,’ Tibana said. ‘But the project had been poorly designed. The factories had reached the stage where they were starting to produce, but the farms were not yet supplying the cashew nuts. … India needed to start servicing the debt.’ So, Mozambique was forced to supply cheap raw materials to Indian industry precisely to make a World Bank project viable which would otherwise have defaulted.’ Tanzânia and Guiné-Bissau also had to close cashew factories to supply India. ‘I was there from the start. I heard about the plan to close the factories,’ Tibana said. Only now is the World Bank releasing the key secret documents.
What they don’t tell us, because it tells the wrong story
State support and family farmers behind the global chicken boom
The Financial Times (26 Aug 2026) started a multi-article series ‘How chicken conquered the world’, and how Brazil is the largest exporter of chicken. In both Brazil and the US half of chickens are grown by family farmers. But the 40-year Brazilian story of how it leaped ahead of the US is the story that is not told by the World Bank and IMF.
The Brazilian government decided to reduce local protein costs and support family farmers with a huge programme through the Brazilian National Development Bank (BNDES), which is larger than the World Bank. It was a four-way collaboration of the private sector, government, BNDES, and farmers. BNDES funded years of research on farming and feeding methods to reduce cost and raise quality. It also funded small farmers and co-operatives. A key part in the value chain is that big companies supply the day old chicks and process, freeze and market the fully grown chickens. And BNDES investment made it an important investor in the Brazilian chicken companies, including holding 18% of the largest meat processing enterprise in the world, JBS. Finally, the state does the health inspection and quality control.
The Brazilian state development bank has part ownership of companies also owned by local oligarchs, and attracted foreign investment, while also promoting rural development and supporting family commercial farmers. One might expect widespread support for development that would support both family farmers and Frelimo oligarchs, and draw in foreign investment not linked to resource extraction.
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So in his 2004 presidential election campaign, Armando Guebuza promised to set up a development bank (and he had the backing of BNDES). Donors were outraged and said they would not accept it. The idea had to be dropped. The IMF has historically and publicly opposed BNDES. Brazil is too big for the Fund to do anything – but for two decades the IMF and donors had the power to block similar actions in Mozambique.
We raised the issue again in 2014 in our book Chickens and beer: A recipe for agricultural growth in Mozambique in English on https://bit.ly/Chickens-Beer and in an Oxfam blog in 2016. It was again ignored. And today the priority is still foreign controlled resource extraction. But it is still possible to promote locally organised rural development and a linked processing industry.
There is again a push for chicken production in Mozambique, but always based on big companies. In April this year Mozambique agreed a chicken factory in the Moamba special economic zone to produce 1.2 million chickens per month. But the lesson of Brazil is a mixed value chain. The big companies provide training, feed, medicines and day old chicks to peasant farmers. Then they guarantee to buy the grown chickens, which they process in big factories. It is an outgrower system which stimulates the family economy. But no one mentions this in Mozambique. jh
Correction: Some versions of the 27 July 2026 newsletter and the short-link were numbered incorrectly as 701. The correct number is 671. Apologies.
