Can Africa industrialize by processing primary commodities? The case of Mozambican cashew nuts

Industrialization strategies based on vertical diversification into processing of primary commodities have long been appealing to low-income countries. The performance of such strategies is mixed. An aggregate-level literature is divided on the advisability of low-income countries processing commodities for export, especially for countries relatively poor in human capital. While this general literature usefully illuminates the policy debate over processing cashew nuts in Mozambique, commodity and country specific factors reveal the weaknesses of conducting debate at too aggregated a level. It may be that the most significant constraints on processing industrialization are political rather than purely technical or economic. (C) 1999 Elsevier Science Ltd. All rights reserved.