AG Kilangi hits last nail on cashew nut fund debate

Dodoma. The Cashew nut Industry Development Fund was not established by an Act of Parliament, the Attorney General (AG) has said, noting that money from the government’s consolidated fund cannot be remitted in an establishment that is was not approved by the legislative body.

Dr Adelardus Kilangi was responding to views from MPs who spent a good part of their time complaining about the government’s proposal to change the Cashewnut Industry Act (Cap,203) – through the Finance Bill 2018 - with a view to ensuring that export levies are collected in the consolidated fund.

This, MPs believe, will be deprive the cashew nut industry of its much-needed funds to boost production.

But in response, the AG made a string of references to substantiate why the cashew nut export levy money is for the public and not for the cashew nut industry.

“The High Court once ruled that cashew nut money was for the government. However, the Cashew nut Board was not satisfied so it appealed against the High Court ruling. In 2001, the Court of Appeal ruled in favour of the government,” he said.

He said the Court of Appeal ruled that the money belongs to the government and that the Cashew nut Board will only collect the money on behalf of the government for the latter to decide on how to utilize the cash.

He said it was in the year 2006 – through the Finance Act 2006 – that an export levy of 10 per cent on unprocessed cashew nuts was included. The Act, he said, noted that 65 per cent would go to the Cashew nut Board.

However, the Cashew nut Industry Act 2009 repealed a1988 law upon which the earlier decisions were made.

Though the Cashew nut Industry Act 2009 maintained the regulations for the 1988 law on cashew nuts, it however did not establish the Cashew nut Fund.

In 2010, cashew industry stakeholders established a Memorandum of Understanding (MoU) that resulted into the formation of the fund under the Cashew nut board.

“The MoU states categorically about the sources of funds that are to be remitted into the fund. The Fund was established as a Trust and not as a law passed by this House. The Export Levy was not part of the sources of monies that are to be remitted into the Fund….It was the MoU that said 65 per cent must go to cashew nut farmers,” he said.

According to Dr Kilangi, the position of the court remains unchallenged and therefore, export levy is public money.

“The Public Finance Act 2001 says about the establishment of funds and that for the funds to be recognized by the government, they must be established by the Minister of Finance….To this effect, the government’s hands are tied and it cannot do otherwise for doing so will be a bleach of the law,” he said.