Oparanya Appoints New Committee to Oversee Nairobi Coffee Exchange Transition Amid Farmers’ Concerns
Cabinet Secretary for Co-operatives and Micro, Small, and Medium Enterprises Development, Wycliffe Oparanya, has appointed a new nine-member committee to guide the transition of the Nairobi Coffee Exchange (NCE) to the Capital Markets Authority (CMA).
This move is part of a broader reform initiative aimed at increasing farmers’ incomes and enhancing transparency in coffee trading, following a strong reaction from farmers.
In an official announcement dated Friday, February 21, Oparanya named Kenneth Gitonga as the chairperson of the newly established committee. Other members appointed include Jackie Muia, Amos Mamboleo, Irene Kabochi, Roselyne Chepkirui, Luka Rotich, Job Kihumba, Raphael Anampiu, and Elphas Tarus.
The notice, which serves to inform the public, highlighted that the committee will oversee the transition of the NCE into a new framework for coffee exchanges, as outlined by the Capital Markets (Coffee Exchange) Regulations and the Crops (Coffee) (General) Regulations.
The reforms aim to bring the NCE under the supervision of the CMA, a decision made to improve transparency and profitability for coffee farmers.
The committee’s primary responsibilities will include reviewing the legal ownership of the NCE, advising on the transfer of its assets and liabilities, and helping to establish a governance framework for the new coffee exchange.
The committee will also handle human resources matters, assist in applying for the necessary licensing with the CMA, and recommend new policies and legislation to boost the coffee sector’s growth.
Additionally, the committee is tasked with researching global best practices in coffee trading, proposing strategies for collaboration among stakeholders in the sector, and, if needed, forming sub-committees to focus on specific areas of the reform.
“The Working Committee will remain in office for a period of 12 months from the date of the announcement, though the Cabinet Secretary may extend the committee’s tenure if deemed necessary,” the notice added.
This appointment comes amid legal challenges filed by some Kenyan coffee brokers, who are attempting to block the implementation of the new Capital Market (Coffee Exchange) Regulations 2024.
The brokers, who filed the lawsuit on February 21, argue that the new regulations would reduce their auction commission from two percent to one percent. They claim that, under the previous system, brokers received a two percent agency fee from gross sales, which was paid in US dollars.
Under the new regulations, however, the brokerage fee has been halved to one percent, while additional charges have been introduced.
These include a 0.3 percent coffee exchange fee, a 0.2 percent CMA statutory fee, and a fee for the direct settlement system provider. The brokers argue that these changes would severely affect their income and are seeking to block the implementation of these regulations in court.
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