<p></p><p>John Magufuli's latest economic plan is, in all senses, his nuttiest. By buying up the entire cashew harvest at a near-100 percent premium, the Tanzanian president hopes to help farmers. In fact, it will only serve to show that statist meddling comes with a downside. Magufuli's scheme has a certain base political logic. Farmers are an important constituency: last year, cashews were the most valuable export crop, earning $540 million. And although only the world's seventh-largest producer, Tanzania is unique among large growers in having an October-December harvest, giving it some temporary pricing clout.</p> <p>But in promising to pay farmers 3,300 shillings/kg ($1.44) for this year's 220,000 tonne cashew harvest, the president has made it the government's problem to sell them on. The mainly Vietnamese firms that turn the fruit into tasty snacks are refusing to buy at the elevated prices. While the price of processed cashew kernels - the bits people eat - jumped 10 percent to $3.80 per pound after Magufuli's bombshell, it has since stabilised, traders said. </p><p>The upshot is Tanzania's fruit is vastly uncompetitive. This raises the prospect of the entire 2018 harvest going to waste. Without any commercial buyers, the army has been called in to collect and store the harvest. Magufuli's plan B is to sell the redundant cashew mountain to his 55 million compatriots. Assuming that doesn't work, the country is on the hook for an unbudgeted $320 million, over 2 percent of planned 2018-19 spending. </p><p>Without cashew cash, Tanzania's$56 billion economy looks a touch shaky. The shilling has shed nearly 1 percent against the dollar this week, close to a record low, and a $66 million Eurobond repayment is due in March. Still, Magufuli's antics have an upside. They remind Africa that liberalisation and fiscal rigour are good things. And that statist intervention can veer towards the nutty.<br></p><p></p>