Kenya asks Iran to ease tea payments

Tea exporters are banking on the fresh talks between Kenya and Iran to ease exchange control that delay payment for their shipments and hinder repatriation of profits.

Foreign affairs Secretary Amina Mohamed is in Tehran to, among other things, “explore ways of addressing challenges faced by Kenyan tea exporters especially with regard to the repatriation of profits.”

At a meeting with Iranian foreign Minister Mohammad Javad Zarif on Tuesday, Ms Mohamed cited “rigorous” inspection and certification among the difficulties that tea exporters face in transferring proceeds from sales to Kenya.

“I, therefore, appeal through you to the relevant authorities to ease the difficulties being encountered by exporters, by streamlining financial intermediation and the certification processes,” Ms Mohamed said in a statement

Kenya’s Sh100 billion-a-year export tea industry get the bulk of its earnings from Egypt, Pakistan, Afghanistan, Iran, Yemen, and Sudan.  

Strict control on foreign exchange accounts by governments of Iran, Yemen and Sudan has particularly had negative impact on tea export, say traders.

Tea exporters say their cash flows have suffered as a number of customers take advantage of slow clearance of dollar-denominated payments in the Islamic states to delay releasing cash by up to six months.

“As long as the currency of trade remains the US dollar, only the bilateral negotiations can remedy the situation,” Mr Peter Kimanga, director at the Mombasa-based Global Tea & Commodities, said.

“At the moment, it is difficult to tell between a good customer and a bad one because they all blame slow process of clearing payment for delays that extend to six months.”