Guinea-Bissau has rich resource endowments and an advantageous geographical location, suitable for a diversified range of agricultural production across the country. Yet both the agri-food sector and the overall economy show little diversification. Economic growth has been low and volatile for decades, while poverty remains widespread. Over time cashews have gained importance in the country’s economy, in terms of fiscal revenue, exports (95 percent of total export revenue comes from Raw Cashew Nuts-RCN) and rural employment (75 percent of rural households). The economy is now concentrated in the production and sale of RCN, making both the country and farmers highly vulnerable to production and market risks. Guinea-Bissau has long been caught in a vicious cycle of fragility, poor governance and weak public sector capacity. Frequent instances of political instability impose large costs on the economic and social development of the country. The country’s fragility is reinforced by the high concentration in and high dependence of Guinea-Bissau’s economy on a single commodity – RCN. The agri-food sector plays a central role in Guinea-Bissau’s economy, comprising almost half of GDP, the vast majority of the labor force and is critical to addressing both poverty and food insecurity, especially for the 120,000 small-scale farmers in the country. Global historical evidence confirms agriculture’s key role in propelling the structural transformation of national economies, mostly relying on increased land and labor productivity in agriculture, which in turn opens opportunities outside of the agriculture sector. Yet, Guinea-Bissau’s agriculture performance is suboptimal, with weak agricultural productivity compared to the region. Given these trends, it is important to consider whether the environment in which the agri-food sector operates is conducive to sustainable and inclusive growth. Beyond RCN, the country has few alternatives in the short term for generating jobs, foreign exchange and widespread growth. Nevertheless, the agri-food sector has seen little technological advance and remains locked in a low-input, low-output equilibrium. Agricultural diversification, both horizontally (expanding the range of agricultural products) and vertically (adding-value to specific products, particularly RCN) could be transformative and strengthen economic resilience while addressing some of the key drivers of the country’s fragility.