Kenya orders audit of KTDA tea factory loans amid farmer outcry over low bonuses
The government has directed a comprehensive review of KTDA-managed factory loans following farmer complaints over reduced bonus payments.
KENYA – The government has ordered an audit of all loans taken by tea factories managed by the Kenya Tea Development Agency (KTDA) following widespread concern among farmers over reduced bonus payments in the current financial year.
Principal Secretary in the State Department for Agriculture, Dr. Kipronoh Ronoh, said the ministry had received numerous complaints from tea growers dissatisfied with the decline in their earnings.
“These concerns have necessitated an in-depth review of the financial obligations and management practices within the factories,” he stated.
In a letter to the Chief Executive Officer of the Tea Board of Kenya, Willy Mutai, Dr. Ronoh directed the board to undertake a comprehensive audit of all loans acquired by KTDA-managed factories.
The review will determine the total amounts borrowed, loan utilization, terms and conditions, and current outstanding balances for each factory.
“The findings of this audit will enable the Ministry to evaluate the financial sustainability of the factories and to formulate appropriate operational measures aimed at addressing the challenges currently facing the tea sub-sector,” Dr. Ronoh said.
He instructed the Tea Board to begin the exercise immediately and submit a detailed report to the Ministry within 14 days.
Following the directive, KTDA has suspended all staff travel, off-site meetings, and training activities across its subsidiaries as part of measures to enhance governance and reduce costs.
“All staff travel is suspended until further notice. No domestic or international travel for any business-related purpose shall occur without explicit written authorisation from the Holdings Board through the Group CEO,” the board stated in a memo to staff.
The move comes amid increasing dissatisfaction among the more than 680,000 smallholder tea farmers represented by KTDA, who have received significantly lower bonus payments compared to the previous year.
Earlier, KTDA attributed the decline in bonuses to shifts in global market dynamics and currency fluctuations. The agency noted that while international tea prices remained relatively stable, the stronger Kenya shilling against the US dollar reduced returns in local currency.
According to KTDA, the exchange rate averaged Kes 144 to the dollar in 2024 but strengthened to about Kes 129 this year, resulting in lower payouts.
“The drop in earnings is mainly attributed to international market conditions and currency exchange movements that were less favourable compared to last year,” KTDA said in a statement.
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