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The East Africa Tea Trade Association (EATTA) has today signed a financing agreement with TradeMark Africa (TMA) that will enable automation of the tea auction in Mombasa. TMA will provide financing of USD 1.5 million.
The automation is expected to reduce the tea trading cycle by about 65per cent from the current 45 – 60 days to less than one month. Reduced delays will ensure that farmers receive timely payments negating need to take loans to finance their producer operations.
Exchange of MOU: Left- Royal Danish Embassy Commercial Attaché, Henrik Petersen; Centre- TMA CEO, Frank Matsaert; Right- EATTA Chairperson Mr. Nicholas Munyi.
The automation is in line with the East Africa governments’ trade facilitation initiatives that are focusing on reducing barriers to trade. It follows a January 2016 directive from Kenya’s President H.E Uhuru Kenyatta who challenged the institution to debunk myths that cartels controlled the auction.
Once fully implemented, the platform, will ensure that, stakeholders of the tea auction including farmers, buyers and sellers, receive real time information on what is happening on the auction bourse, which will boost confidence in the process. Further, the automation will reduce delays and paper work, which is synonymous with the manual systems. The tea brokers will benefit from an automated and streamlined trading platform that reduces complex and bureaucratic trading processes and physical movement of documents to various players.
The tea producers both in Kenya and other countries in the region will have real time access to information on the tea sales as well as have lower logistics costs as they will be able to access the information online eliminating the need for travel to Mombasa. Overall, the increase in trade will benefit the farmers and the economies of the tea producing countries that sell their teas through the Mombasa Tea Auction.
Source: EA Business Times
TradeMark Africa (TMA) is an aid-for-trade organisation that was established with the aim of growing prosperity in East Africa through increased trade. TradeMark Africa (TMA) operates on a not-for-profit basis and is funded by the development agencies of the following countries: Belgium, Canada, Denmark, Finland, the Netherlands, Sweden, UK, and USA. TradeMark Africa (TMA) works closely with East African Community (EAC) institutions, national governments, the private sector and civil society organisations.
Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of TradeMark Africa.