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Tanzania cashewnut still hard to crack as deal flops

Saturday May 11 2019
farmer

A cashewnut farmer inspects his farm. Indo Power was obliged to make full payments within two months’ of signing the contract but was disqualified end of March. FILE PHOTO | NMG

By EMMANUEL ONYANGO

A Kenyan firm which had signed a contract with the Tanzanian government in January to purchase 100,000 tonnes of stock of cashewnuts, has been thrown out of the deal, The EastAfrican has learnt.

Tanzania's Minister for Trade and Industry Joseph Kakunda told The EastAfrican in a telephone interview that, “the firm has failed to comply with the conditions of the contract entered.''

He said, Thika-based Indo Power Solutions Ltd was obliged to make full payments within two months’ of signing the contract but was disqualified end of March for failure to meet the requirements within the stipulated time frame.

Indo Power was among several foreign companies and the only one from the region to bid for the cashewnuts tender and won.

Payment

The contract was for the purchase of a stock of raw cashewnuts from the southern regions of Mtwara, Lindi and Ruvuma.

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“The buyer will be required to pay $180.2 million to the Tanzania government within two months’ time, the contract document said Indo Power to date has not lived up to its part of the deal, leading to its disqualification.

Mr Kakunda’s announcement of Indo Power's disqualification came at the same time with another announcement this week in parliament by Deputy Minister for Trade and Industry Stella Manyanya, that the government doesn’t have a specific price for raw or processed cashewnuts and that this time around, the price would depend on negotiations with prospective buyers.

Ms Manyanya was responding to a supplementary question asked earlier by Cecil Mwambe (MP, Chadema.)

She wanted to know the actual indicative prices introduced by the government to prospective buyers of raw cashewnuts and for those already processed, and requested for a clarification over the on-going controversial price rates for a kilogramme of cashewnuts.

The deputy minister in her answer added that, the government would be looking at costs incurred and the price agreed between buyers and sellers.

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