The government has ordered a comprehensive audit of all loans obtained by tea factories managed by the Kenya Tea Development Agency (KTDA) amid growing concerns from farmers over low bonus payments this year.
In a letter addressed to Tea Board of Kenya Chief Executive Officer, Willy Mutai, the Principal Secretary in the State Department for Agriculture, Kipronoh Ronoh, directed the board to undertake an in-depth financial review of KTDA-managed factories.
The Ministry of Agriculture and Livestock Development said it had received increasing concerns from tea growers regarding the low bonus payments declared by factories managed by KTDA in the current financial year, prompting the need for a detailed audit.
The audit is expected to determine the total amount of loans borrowed by each factory, how the funds were utilized, the terms and conditions of the loans, and the current outstanding balances.
“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,” the letter reads in part.
Ronoh directed the Tea Board to commence the audit immediately and submit a detailed report to the Ministry within fourteen days of the date of the directive.
Copies of the letter were also sent to the Cabinet Secretary for Agriculture and Livestock Development, the Chairman of the Tea Board of Kenya, and the Chairman of the Kenya Tea Development Agency Holdings Ltd.
The move is expected to shed light on the financial management of KTDA-managed factories, whose performance directly affects earnings for thousands of small-scale tea farmers across the country.
Tea farmers decried low bonus payments this year, prompting the government to intervene.
KTDA had initially attributed the decline in bonuses to shifting global market dynamics and currency fluctuations.
The agency explained that the weaker exchange rate of the Kenya shilling against the US dollar had adversely affected earnings.
