Kenya to inject US$27M in tea factories to boost efficiency and global competitiveness
Government funding targets 19 tea factories to enhance efficiency, support farmers’ earnings and strengthen Kenya’s position in global tea markets amid emerging export challenges.
KENYA – Kenya has announced plans to inject Kes 3.5 billion (US$27.0M) into nineteen tea factories as part of ongoing reforms aimed at upgrading infrastructure and improving operational efficiency in the sector.
The funding initiative is designed to boost farmers’ earnings while strengthening the global competitiveness of Kenyan tea, a key export commodity.
Principal Secretary for Agriculture Kiprono Rono confirmed the allocation, highlighting the government’s focus on modernising factory operations to meet evolving quality and market demands.
“We have set a budget of Kes 3.5 billion to improve infrastructure in all 19 tea factories to boost their efficiency and meet quality demands,” said Dr. Rono.
In addition to infrastructure upgrades, the government is planning fiscal measures to support the tea value chain. These include reducing taxation on tea and waiving levies on packaging materials to promote value addition.
Rono noted that reforms will also enable direct tea sales, helping to cut transaction costs and improve profit margins for farmers.
The government is also seeking to expand market access for Kenyan tea. Dr. Rono announced that the country will host a global tea conference in October, bringing together industry stakeholders to explore trade opportunities and investment partnerships.
Beyond tea, the reform agenda targets other agricultural value chains, including coffee, pyrethrum, avocado and sugar, as part of broader efforts to strengthen the agricultural sector.
To support farmers at the grassroots level, the government is rolling out 1,450 ward-level cooperatives that will provide access to certified seedlings and financing. New last-mile fertiliser distribution centres are also being introduced to supply affordable farm inputs and extension services.
Patrick Mutai welcomed the investment in the tea sector and other value chains, calling for closer collaboration between county and national governments to ensure effective implementation.
The funding comes at a time when Kenya’s tea industry faces logistical challenges linked to disruptions in key shipping routes, raising concerns about rising export costs and potential impacts on factory cash flow.
Sign up HERE to receive our email newsletters with the latest news and insights from Africa and around the world, and follow us on our WhatsApp channel for updates.
