KENYA – Kenya’s coffee farmers are set to benefit from a Kes6 billion (US$45.28M) debt waiver as part of the government’s efforts to revitalize the coffee sector.
While announcing the initiative during a U.S state visit, President Ruto emphasized that the debt write-off aims to rejuvenate the struggling coffee industry and improve the livelihoods of over 600,000 farmers.
“In the next Cabinet meeting, we will approve a write-off of Kes6 billion to our farmers so that we can reduce debts on coffee farming,” he said, highlighting that this move is intended to inject new energy into the sector and support ongoing reforms.
These reforms are designed to expand coffee cultivation and increase farmer revenues. The President also announced the establishment of a Kes2 billion (US$15.09) fund to support cherry farmers
This fund, part of the budgetary proposals for the next financial year pending before the National Assembly, will provide financial cushioning for farmers while they await coffee auctions, alleviating immediate financial pressures.
This announcement follows the Cabinet’s approval of a sugar debt write-off in 2023, after receiving concurrence from both houses. However, there has been some reluctance to waive coffee debts due to concerns about potential fraudulent claims.
Cooperatives Cabinet Secretary Simon Chelugui noted last October that the government was conducting a forensic audit of the Kes4 billion (US$30.19M) debt owed by coffee farmers to various value chain players over the years.
Chelugui explained that the audit is necessary to verify the true extent of the debt and ensure that any previous waivers are accounted for.
“We are currently undertaking a forensic audit of data received from Co-operative Bank, co-operative unions, and the commodity fund. The aim of the verification process is to ascertain the true picture in terms of the amount overdue and whether there are debts that were waived last time,” he said.
The news of the debt waiver comes at a time when Kenya’s coffee industry has seen a slight increase in earnings. Farmers recently earned Kes677.9 million (US$5.18M) from the latest auction at the Nairobi Coffee Exchange (NCE), a notable improvement from the previous week’s earnings of Kes615.5 million (US$4.7M).
The auction saw participation from 19 local and international buyers, showcasing products from 1,133 cooperatives and estates.
Liked this article? Subscribe to Food Business Africa News, our regular email newsletters with the latest news insights from Africa and the World’s food and agro industry. HERE
