Tea farmers have earned a record gross payment of Sh85.74 billion riding on a bumper harvest in the past season that defied the fall in global market prices, marking the third year of improved earnings.
At Sh85.74 billion, Kenya’s tea earnings are up 9.4 per cent compared to last season’s total income of Sh78.31 billion, according to the Kenya Tea Development Agency (KTDA).
A kilogramme of green leaf fetched an average of Sh52.51 in the last season, having dropped from Sh58.61 in 2017. KTDA linked the drop in price per kilo to “escalating costs of production and depressed prices” during the last quarter of the financial year.
KTDA said the higher output means tea farmers took home Sh62.35 billion after expenses in the current year, 8.6 per cent higher than the Sh57.44 billion paid out in the year to June 2017, translating to better average returns for the over 600,000 farmers.
The farmers have already earned Sh18.03 billion in initial monthly payments and will receive the Sh44.33 billion second payment later this month.
The payout represents a return of 73 per cent of the total tea revenue, the remaining 27 per cent having gone to “covering various costs of production,” KTDA said.
KTDA chief executive Lerionka Tiampati said the increased earnings were due to high volumes of green leaf output resulting from improved rainfall and stable tea prices.
Green tea leaf production rose 21 per cent in the period under review on improved rainfall compared to the dry conditions in the previous year.
KTDA-managed tea factories received a cumulative 1.18 billion kilogrammes of green leaf up from 976.78 million in the same period last year.
Farmers earn Sh15 per kilo of green leaf delivered per month, while the rest is paid as second payment at the end of the financial year.
KTDA-managed factories, the agency noted, faced a number of challenges such as high cost of energy and labour, among others. “The factories are also grappling with other challenges like tea hawking that has led to a reduction in the amount of green leaf available to some factories, thereby affecting their operating capacity, and the quality of leaf available for processing,” it said.
To deal with rising costs of production, KTDA said, factories are investing in small hydropower stations (SHPs) to deliver affordable power to factories.
The list of SHPs that have been completed and are generating electricity includes Imenti, Gura and Chania.
Factories have also established wood plantations that are expected to be a long-term source of wood fuel for their operations. Besides, as part of the diversification efforts, a number of factories have ventured into orthodox tea production to reduce reliance on black CTC tea.
Kenya is the leading exporter of black CTC teas in the world accounting for about 23 per cent of the global exports.
Out of this, KTDA accounts for about 13 per cent of the global tea exports. The agency exports the bulk of its teas to Pakistan, UK, Egypt, Afghanistan, Iran, Sudan, Yemen and UAE, among other countries. Currently, the agency is developing new markets such as Russia, Kazakhstan, US and Poland.
World Bank pushes G-20 to extend debt relief to 2021
World Bank Group President David Malpass has urged the Group of 20 rich countries to extend the time frame of the Debt Service Suspension Initiative(DSSI) through the end of 2021, calling it one of the key factors in strengthening global recovery.
“I urge you to extend the time frame of the DSSI through the end of 2021 and commit to giving the initiative as broad a scope as possible,” said Malpass.
He made these remarks at last week’s virtual G20 Finance Ministers and Central Bank Governors Meeting.
The World Bank Chief said the COVID-19 pandemic has triggered the deepest global recession in decades and what may turn out to be one of the most unequal in terms of impact.
People in developing countries are particularly hard hit by capital outflows, declines in remittances, the collapse of informal labor markets, and social safety nets that are much less robust than in the advanced economies.
For the poorest countries, poverty is rising rapidly, median incomes are falling and growth is deeply negative.
Debt burdens, already unsustainable for many countries, are rising to crisis levels.
“The situation in developing countries is increasingly desperate. Time is short. We need to take action quickly on debt suspension, debt reduction, debt resolution mechanisms and debt transparency,” said Malpass.
Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans
The Central Bank of Kenya (CBK) will regulate interest rates charged on mobile loans by digital lending platforms if amendments on the Central bank of Kenya Act pass to law. The amendments will require digital lenders to seek approval from CBK before launching new products or changing interest rates on loans among other charges, just like commercial banks.
“The principal objective of this bill is to amend the Central bank of Kenya Act to regulate the conduct of providers of digital financial products and services,” reads a notice on the bill. “CBK will have an obligation of ensuring that there is fair and non-discriminatory marketplace access to credit.”
According to Business Daily, the legislation will also enable the Central Bank to monitor non-performing loans, capping the limit at not twice the amount of the defaulted loan while protecting consumers from predatory lending by digital loan platforms.
Tighter Reins on Platforms for Mobile Loans
The legislation will boost efforts to protect customers, building upon a previous gazette notice that blocked lenders from blacklisting non-performing loans below Ksh 1000. The CBK also withdrew submissions of unregulated mobile loan platforms into Credit Reference Bureau. The withdrawal came after complaints of misuse over data in the Credit Information Sharing (CIS) System available for lenders.
Last year, Kenya had over 49 platforms providing mobile loans, taking advantage of regulation gaps to charge obscene rates as high as 150% a year. While most platforms allow borrowers to prepay within a month, creditors still pay the full amount plus interest.
Amendments in the CBK Act will help shield consumers from high-interest rates as well as offer transparency on terms of digital loans.
Scope Markets Kenya customers to have instant access to global financial markets
NAIROBI, Kenya, Jul 20 – Clients trading through the Scope Markets Kenya trading platform will get instant access to global financial markets and wider investment options.
This follows the launch of a new Scope Markets app, available on both the Google PlayStore and IOS Apple Store.
The Scope Markets app offers clients over 500 investment opportunities across global financial markets.
The Scope Markets app has a brand new user interface that is very user friendly, following feedback from customers.
The application offers real-time quotes; newsfeeds; research facilities, and a chat feature which enables a customer to make direct contact with the Customer Service Team during trading days (Monday to Friday).
The platform also offers an enhanced client interface including catering for those who trade at night.
The client will get instant access to several asset classes in the global financial markets including; Single Stocks CFDs (US, UK, EU) such as Facebook, Amazon, Apple, Netflix and Google, BP, Carrefour; Indices (Nasdaq, FTSE UK), Metals (Gold, Silver); Currencies (60+ Pairs), Commodities (Oil, Natural Gas).
The launch is part of Scope Markets Kenya strategy of enriching the customer experience while offering clients access to global trading opportunities.
Scope Markets Kenya CEO, Kevin Ng’ang’a observed, “the Sope Markets app is very easy to use especially when executing trades. Customers are at the heart of everything we do. We designed the Scope Markets app with the customer experience in mind as we seek to respond to feedback from our customers.”
He added that enhancing the client experience builds upon the robust trading platform, Meta Trader 5, unveiled in 2019, enabling Scope Markets Kenya to broaden the asset classes available on the trading platform.