Tanzania, Kenya’s relationship sour as Magufuri drops shs 418 Billion Cashew Nut Deal

Tanzania's minister for Industry, Trade and Investment Prof Joseph Buchweishaija.

On January 30 the, Tanzanian government through the Cereals and other Produce Board, signed an agreement with little known Kenyan firm Indo Power Solutions to buy 100,000 tonnes of cashew nut worth $180.2 Million equivalent to Ksh 418 Billion.

Unfortunately, the company will not be allowed to buy the cashew nuts after it failed to fully honor the agreement.

Kenyan firm loses on cashew nut deal

Indo power Solutions did not implement provisions of the contract on time, according to Tanzanian Industry and Trade Minister Joseph Kakunda.

He said the company had failed to finalize important legal procedures adding that the government had now signed agreements with six other firms noting that two of them are local while the rest are foreign-owned.

“Forget about the company that signed a contract with us in Arusha (Indo Power) because it failed to honour the agreement. We have signed contracts with six other firms, which are now in the process of fulfilling provisions of the agreements. Those that will make payments first are the ones that will collect the merchandise,” he said.

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While committing to the agreement, Indo Power chief executive Brian Mutembei said the company would directly pay the Bank of Tanzania for the raw cashew nuts, and shipment to Kenya would begin on the first week of February.

There were fears on whether the Kenyan firm would have the capacity to fulfill the deal, with concerns that Indo Power could have acted as a broker for a third party, following public questions about its registration and capacity, and the authenticity of the officials behind the lucrative deal.

During the signing ceremony, Indo Power chief executive Brian Mutembei said the company would directly pay the Bank of Tanzania for the raw cashew nuts, adding that shipment to Kenya would begin on the first week of February.

But Mr. Kakunda said the company had failed to finalize important legal procedures. He added that the government had now signed agreements with six other firms.

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A senior Tanzanian government official has defended the $180 million cashew nuts deal with Indo Power Solutions, a Kenyan company whose credibility has now been brought to question.

Trade and Industries Permanent Secretary Prof Joseph Buchweishaija, said the track record of the company was not the basic criterion for awarding it the contract to purchase 100,000 tonnes of cashews nuts from Tanzania.

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