Economy

Tea companies cut investments over land lease fears

tea

Workers at a tea processing factory in Nyeri. Tea multinationals are withholding investments due to uncertainty over their land leases after the change in the supreme law reduced their ownership from 999 years to 99 years. PHOTO | FILE

Tea multinationals are withholding investments due to uncertainty over their land leases after the change in the supreme law reduced their ownership from 999 years to 99 years.

The Kenya Tea Growers Association (KTGA)  chief executive Apollo Kiarie yesterday said large-scale investors who currently account for about 40 per cent of Kenya’s total tea production are anxious over the future of their enterprises since county governments have publicly opposed renewal of their leases.

“Multinational investors are worried that devolution is here to take away investments they have developed over decades and are unsure of their future.

READ: Proposes payment for expired leases

They are now sitting on millions of shillings that could have been spent to modernise operations on their farms and factories,” said Mr Kiarie at a conference for tea stakeholders in Nairobi.

The 2010 Constitution vests the decision whether to renew leases with county governments.

Huge chunks of land

Nandi, Murang’a and Kiambu county governments have openly declared they will not renew the leases unless the multinationals cede part of their huge chunks of land for community use.

The devolved units said they needed land for establishment of social amenities such as trading centres, schools, churches, dispensaries, cattle dips, residential estates, cemeteries as well as industrial areas and recreational grounds.

Agriculture Secretary Willy Bett however sought to calm the investors’ nerves saying the government was handling the matter.
Tea is among Kenya’s top foreign exchange earners besides tourism, coffee and diaspora remittances.

The tea stakeholders meeting convened by Agriculture Fisheries and Food Authority (AFFA) heard that there was a need to come up with innovative technologies that will help tea factories engage in value addition.

Council of Governors Economic Adviser Danstan Ngumo said that all the 18 counties that grow tea were concerned over diminishing returns and were only interested in enhancing farmer incomes.