The government has directed the Kenya Tea Development Agency (KTDA) to release Ksh2.7 billion to tea farmers as part of their 2024–2025 bonus payments, following the recovery of funds previously held in two collapsed banks.
In a letter addressed to KTDA Holdings Chief Executive Officer Wilson Muthaura, Principal Secretary in the State Department for Agriculture, Dr. Kipronoh Ronoh, said the refund represents deposits that had been locked in Chase Bank Ltd and Imperial Bank Ltd, both of which went into liquidation.
Dr. Ronoh said the directive follows a presidential order issued on September 11, 2025, when President William Ruto officiated the release of the funds by the Kenya Deposit Insurance Company (KDIC).
The President instructed that the entire sum be distributed equitably to tea farmers through their factories and reflected in their pay slips as a Government of Kenya Refund.
“The President directed that the funds be paid to farmers as part of the bonus payments for the period 2024–2025,” the letter states.
The letter added, “You are hereby required to ensure that the funds are paid equitably to farmers and reflected in their payslips as GoK Refund.”
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The PS noted that this year’s tea bonus was comparatively low, attributing the decline to high factory operational costs, poor governance, and management malpractices within the sector.
He urged KTDA to undertake urgent reforms to enhance efficiency, improve governance, and reduce production costs.
“As the government continues to support the sector by opening up more markets for tea and improving factory infrastructure, KTDA should reform itself and address issues leading to a high cost of production,” Dr. Ronoh added.
The government has embarked on a raft of interventions aimed at revitalizing the tea industry, including fertilizer subsidies, removal of VAT on tea packaging materials, and promotion of value addition.
The copies of the directive have been sent to Agriculture and Livestock Development Cabinet Secretary Sen. Mutahi Kagwe, KTDA Chairman Mr. Chege Kirundi, and Tea Board of Kenya CEO Mr. Willy K. Mutai for compliance and oversight.
The release of the Ksh2.7 billion refund is expected to provide a major relief to thousands of smallholder tea farmers across the country, many of whom have endured declining incomes amid fluctuating global prices and rising production costs.
By Our reporter
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