Githunguri Member of Parliament Gathoni Wamuchomba
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Just days before President William Ruto is scheduled to visit the Mount Kenya region, Githunguri Member of Parliament Gathoni Wamuchomba has publicly challenged newly gazetted levies impacting the coffee sector.
Wamuchomba is urging the President to reconsider the levies, which are poised to become a central point of discussion during his visit.
The contested regulations, published by Treasury Cabinet Secretary John Mbadi on February 7, 2025, have ignited discontent in the Central region, a key coffee-growing area. Wamuchomba argues that the levies were introduced without adequate consultation with coffee farmers or proper parliamentary review, raising concerns about their potential impact on the region’s economic stability.
A primary concern revolves around the Direct Settlement System (DSS), a payment framework linked to the Nairobi Coffee Exchange. Wamuchomba contends that the DSS levies effectively double charges for farmers by imposing both transaction costs and annual fees on brokers. She has questioned the justification for this structure, likening it to a scenario where banks charge fees on client earnings at the point of origin.
Despite Wamuchomba's earlier communication with President Ruto this month, she claims the issues remain unaddressed, with uncertainty lingering over the regulatory status of the DSS.
"Has DSS transitioned into a new institution governed under separate laws, or is this an overreach?" she inquired, emphasizing the need for greater transparency.
The proposed levies would subject farmers to deductions totalling 1.8% per transaction, encompassing broker fees, coffee exchange fees, DSS fees, and statutory fees payable to the Capital Markets Authority. Already burdened by declining prices and bonuses, the coffee sector faces the prospect of further economic strain under these new regulations. Wamuchomba is advocating for the annulment of the levies pending thorough consultations with all relevant stakeholders.
President Ruto's upcoming visit to Mount Kenya occurs against a backdrop of ongoing efforts to reinforce relationships with a region vital to his administration’s support. Following political shifts, including the impeachment of former Deputy President Rigathi Gachagua, the President's tour is anticipated to serve as both a demonstration of loyalty and an opportunity for political reconciliation. The debate over coffee-sector reforms will test the President's ability to navigate regional concerns while maintaining national economic objectives.