By Violeta Gonzalez, Head of Partnerships, Outreach and Resource Mobilisation, Enhanced Integrated Framework (EIF)
April is usually cashew marketing season across West Africa – a lively affair where traders tout bags of recently harvested raw nuts to buyers, most of whom have flown in from Vietnam and India. But 2020 was not a usual year. COVID-19 containment measures meant closures – of international borders, stopping major buyers travelling to West Africa – as well as domestic markets, leading to violent clashes between police and traders. It goes without saying that the impact of these border and market closures came at a great cost to the livelihoods of many West African cashew farmers, producers, and traders. Small businesses faced plummeting revenues or were at the brink of bankruptcy. Instead of offering support, local banks and financial institutions supporting West African cashew producers slashed lending during the pandemic.
Agriculture is a risky business at the best of times – good prices depend on good yields, which depend on good weather. While speciality crops like cashews can generate high returns, the risk of capital loss is also high, meaning many banks are hesitant to provide the capital that’s needed for small businesses in West Africa’s cashew sector to flourish. The cashew businesses that have weathered the economic storm created by COVID-19 have something in common – the long-term backing of impact investors who not only provide capital and technical assistance, but who also have a deep understanding of the challenges of the agricultural sector.Continue reading