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Interior Cabinet Secretary Fred Matiangi.

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Govt to work with new KTDA Directors to reform troubled tea sector

NAIROBI, Kenya, May 14- The Government has committed to work with the newly elected Kenya Tea Development Agency (KTDA) directors, in a bid to reform the troubled sector.

Interior Cabinet Secretary Fred Matiangi said the focus will be to root out unscrupulous middlemen, as well as implement President Uhuru Kenyatta’s tea reforms in the sector.

“These reforms will happen, and we are going to stay on this course until this sector is reformed,” he said.

Last year, the Ministry of Agriculture gazetted the new tea regulations that will govern the tea sector in the country.

One of the regulations stipulates that all tea produced in Kenya should be sold through the auction process and the licensed tea auction organizers to establish electronic trading platform.

“We must defend and work for the interest of farmers in this country. Tea does not belong to KTDA, it belongs to farmers,” he said, “Sometimes you feel like we are living at the mercy of cartels. They are all part of the system that is feeding of the sweat and the hard work of the ordinary people.”

He directed administrators to “assist” the new officials.

Consequently, the regulations recommend that the tea farmers who market the product through the Kenya Tea Development Agency be paid 50 percent of the delivery monthly, with the rest paid as a bonus annually.

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Early this year, Agriculture Cabinet Secretary Peter Munya warned that the government will not allow cartels and unscrupulous players in the tea sector to derail implementation of new regulations.

“We cannot continue derailing the implementation of the new regulations as farmers are eagerly waiting to get maximum benefits of the new laws. Those fighting the regulations are the people who exploit farmers and live a better life when farmers languish in poverty,” he said during a farmer’s engagement meeting in Muranga County, on January 22.

In March this year, President Kenyatta directed Munya to oversee a probe into the giant agency, in directives contained in Executive Order 2 of 2021.
He also directed Attorney General Kihara Kariuki “to conduct an inquiry into the alleged statutory and regulatory compliance breaches allegedly committed by KTDA and its directors.”

The Executive Order No. 3 of 2021 on the Revitalization of the Tea Sub-Sector directed the Attorney General to conduct an inquiry into allegations of statutory and regulatory breaches committed by KTDA among other instructions.

The President pointed out that setting of tea prices in Kenya remains an opaque and exclusionary process that is sharply dissimilar from the process in other comparative jurisdictions, KTDA’s network of subsidiaries, which includes offshore subsidiaries, are locked in inherent conflicts of interest and are also misaligned with the interest of tea farmers and that KTDA’s web of business has made its Management lose focus on KTDA’s core business, “resulting in the need to address and reconsider the future of underperforming and non-core business.”

Further, the President raised concerns over on how the agency has conducted its business over the years, saying in some instances, “acted contrary to applicable Kenyan laws, including the Companies Act; as well as acting against the interests of small-holder farmers despite them being its core constituency.”

The President also pointed out that there have been “credible allegations raised regarding potential Price and Auction Manipulation, Abuse of Dominance, Insider Trading, Wastefulness and Breach of Director’s Fiduciary Duties, and other alleged malfeasances by or within KTDA.”

As a result, he directed the Attorney General to, “to conduct an inquiry into the alleged statutory and regulatory compliance breaches allegedly committed by KTDA and/or its Directors; including potential Price and Auction Manipulation, Abuse of Dominance, Insider Trading, Wastefulness and Breach of Director’s Fiduciary Duties, and other alleged malfeasances by or within KTDA.”

The agency had moved to court to challenge the proposals by the President.

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