Gachagua projects tea exports to hit Sh150b this year on reforms

Kenya’s revenues from tea exports are projected to hit $1.01 billion (Sh150 billion) in 2023, up from $932 million (Sh138 billion) recorded last year, a senior government official has said.

Deputy President Rigathi Gachagua said the government will pursue more changes in the sub-sector and specifically restructuring the Kenya Tea Development Agency (KTDA) Holdings with a view to improving the financial base of the growers.

“Our aim is to ensure the tea earnings continue increasing annually and opening more markets globally. For example, Last year, we earned Sh138 billion. This year, as we fully roll out reforms, we project the export earnings to rise to about Sh150 Billion this year,” he said.

Topping the list of new changes Gachagua explained include restructuring KTDA subsidiaries and making them more profitable to the tea business.

He directed the agency board to carry out an audit of all its subsidiaries with a view to terminating those making losses and enhancing governance of the profit making ones.

“The government focus is to assist the farmers’ agency to live to its key mandate of receiving, processing and marketing growers produce. We discourage the agency from committing smallholder earnings into other investment opportunities. Leave the business of real estate, insurance and banking to other players in the market. Ensure farmers benefit first before anything else,” he added.

KTDA Chief executive Wilson Muthaura confirmed the affiliates due to the ongoing reforms will be restructured to suit the changing business and management dynamics. This is over and above staff rationalization at all management levels.

Gachagua said the government will fast track development of a framework to help in easing the cost of production, mainly electricity.

On Wednesday when announcing the 2023 tea bonus to small scale farmers at his official residence Karen, the DP stated the government will equally assist farmers to install machines for orthodox tea production. Muthaura stated that currently there are 11 factories currently undertaking orthodox tea production and their books of accounts are healthy compared with others. The number is expected to increase to 29 and thus deepen the country’s market share globally.

In order to overcome competition in the country’s traditional tea markets including Pakistan, the United Kingdom, the United Arab Emirates, Yemen and Russia, Kenya plans to expand the production of specialty teas such as purple and orthodox tea