State gets closer to Sh6.7b debt waiver for coffee farmers

Tuesday, June 11th, 2024 01:15 | By
Cabinet Secretary Simon Chelugui. PHOTO/Print
Cabinet Secretary Simon Chelugui. PHOTO/Print

Ministry of Co-operatives and Micro, Small and Medium Enterprises (MSMES) Development will today present a cabinet memo seeking approval of coffee debt waiver amounting to Sh6.7 billion. 

Cabinet Secretary Simon Chelugui (pictured) said seeking debt write-off approval from the cabinet is part of the ongoing process to fully revive the coffee sub-sector.

“Today I will be formally seeking cabinet waiver approval of Sh6.7 billion coffee debt which majority of the coffee farmers are currently grappling with,” the CS said yesterday.

Proposed amendments

During a media engagement on coffee sub-sector reforms forum organised by the Office of the Deputy President (ODP) Rigathi Gachagua at a Nairobi hotel, Chelugui stated that the debts date back to 20 years and are blamed partly for the dismal performance of the sub-sector.

Speaking during the event, Chief of staff at the ODP, Wanjiku Wakogi noted that the coffee reform agenda has realised fruits with the farmers liberated from the hands of cartels and enabled to fully participate at all levels.

“Deputy President has championed and coordinated the legal, policy and administrative interventions through various farmer-led initiatives,” she said.

Chelugui explained that the formal presentation of the debt waiver request follows a forensic audit of the data received from Co-operative Bank, County co-operative unions, millers, savings and credit co-operative organisations (Saccos) and the commodity fund.

The verification process of the debt, Chelugui added has ascertained the true picture in terms of the amount overdue.

“Further, the debt will be confirmed by National Treasury and Planning ministry, Office of the President, Attorney-General, Ministry of Co-operative and MSMEs and sector stakeholders. This is aimed at giving a complete approach,” he added.

The debt waiver programme was initiated by the former administration of President Mwai Kibaki in 2006 as part of assisting the local farmers overcome challenges disrupting desired industry growth.

Between 2006 and 2019 government waived Sh12.2 billion, though value chain players claimed the written-off debts and other reforms enacted have not motivated desired growth in the sub-sector.

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