Category: Business Daily

The Kenya Tea Development Agency (KTDA) has blamed a strong Kenyan shilling against the US dollar and poor tea quality from certain regions for lower tea bonus payments to farmers this year.

KTDA defended the payment, saying this year’s global trading conditions are beyond its control, but it has already adopted a plan to cushion farmers and stabilise their incomes.

Thousands of farmers serving 67 factories under KTDA factories were shocked to receive lower bonuses, with some reporting drops of more than Sh110 a kilo compared with last year’s earnings.

The agency, however, vowed to reverse the situation through a raft of strategies, including bigger trade in specialty tea. The regional auction in Mombasa traded its maiden batch of specialty orthodox tea on Wednesday last week in a strategy aimed at curbing the plummeting fortunes from dealing in traditional black tea.

During the sale, a kilo of orthodox tea fetched Sh622.93 ($4.82) compared to Sh270.11 ($2.09) for the traditional cutting- tear- and- curl (CTC) tea.

‘Looking forward, KTDA is taking steps to stabilise farmers’ income. We are expanding production of orthodox tea, which fetches higher prices in niche markets, to reduce reliance on CTC teas. We are working with the government to promote value addition, reduce packing costs, and open new markets, including China,’ read the statement.

KTDA is also investing in factory modernisation and energy solutions to cut costs and improve competitiveness.

In 2024, the Kenyan shilling traded at an average of Sh144 to the US dollar, while in 2025 the average was Sh129. This weaker exchange rate meant that even where international prices were stable, the amount realised in Kenyan shillings was significantly lower.

Average tea prices across regions reflect this challenge. In the East of Rift, Kiambu fetched Sh371 per kilo, a drop of Sh46 from last year, Murang’a earned Sh376, down by Sh42, Nyeri earned Sh388, down by Sh42, Kirinyaga earned Sh400, down by Sh38, Embu earned Sh404, down by Sh34, and Meru earned Sh381, down by Sh46.

In the West of Rift, Kericho earned Sh245, a drop of Sh101; Bomet earned Sh209, a drop of Sh85; Nyamira earned Sh266, a reduction of Sh106; Kisii got Sh246, a drop of Sh95, and Nandi /Vihiga earned Sh208, a drop of Sh66.

These are prices for made tea, and when converted to green leaf using the 4.4 ratio, they explain the reduced farmer payouts across the board.

In its statement dated September 30, 2025, KTDA said differences in the second payment between East and West of the Rift are due to quality factors, market dynamics, and costs, further reducing net earnings.

‘Independent producers and plantation companies in the West of Rift, outside KTDA, have reported similar difficulties, confirming that these disparities are market-driven and not unique to KTDA-managed factories. It is important that tea is not politicized,’ said KTDA.

From the gross revenues earned this year, KTDA has already factored in the monthly payments remitted to farmers and the operational costs covering processing, marketing, and logistics.

The final payment is therefore the balance after these obligations. While understandably disappointing to many, this year’s final is a direct reflection of global trading conditions beyond KTDA’s control.

The share of electricity imports has for the first time crossed the 10 percent mark as Kenya deepens its reliance on neighbouring countries to avoid power rationing and blackouts.

Data from the Energy and Petroleum Regulatory Authority (Epra) shows that electricity imports accounted for 10.6 percent or 1.53 billion kilowatt-hours (kWh) of the 14.38 billion units bought by Kenya Power in the year to June, up from 4.87 percent in June 2023 and a paltry one percent in 2021.

Credit rating agencies play a vital role in determining the cost of debt for many African countries who have been accessing international capital markets to fund their budgets.

The role played by these agencies has, however, been put under scrutiny by leaders including President William Ruto who has raised issues over potential bias against African issuers. This critique has seen African governments move to create their own rating outfit.

US President Donald Trump’s administration supports a one-year extension of the African Growth and Opportunity Act, the trade initiative with sub-Saharan Africa that expires on Tuesday, according to a White House official.

Since coming to office in January, the administration had not publicly stated a position on the act, known as Agoa, a law first passed in 2000 to provide duty-free access to the US market for thousands of products.

Despite broad bipartisan support for renewing Agoa, which supporters say helps diversify US supply chains and counter Chinese influence in Africa, the law’s prospects for extension before it lapses are deeply uncertain.

Its only realistic legislative path is to be attached to the stopgap funding bill Republicans are pushing to keep the US government open past Tuesday, although it could also be reinstated later.

African governments and investors have been lobbying in recent weeks for a one- or two-year extension after efforts to secure a longer-term renewal did not make it to a vote in Congress.

Agoa is credited with supporting hundreds of thousands of jobs in more than 30 eligible countries.

Its impact has been diluted by the bilateral tariffs Trump introduced in August, which exposed products once exported duty-free under Agoa to US import taxes of between 10 percent and 30 percent.