FKE: Thousands of jobs lost as high costs force firms to shut down
FKE Executive Director Jacqueline Mugo said the ongoing ban on Kenyan tea by Sudan has already led to losses estimated at 2.4 billion shillings.
The Federation of Kenya Employers (FKE) has raised concern over growing trade restrictions and local levies that are threatening Kenya’s tea sector and the country’s role as a regional trade hub.
FKE Executive Director Jacqueline Mugo said the ongoing ban on Kenyan tea by Sudan has already led to losses estimated at 2.4 billion shillings, with tea stuck at ports and warehouses, and called for immediate government intervention.
"We are deeply concerned about the ban by the government of Sudan on Kenyan tea imports since March 11, 2025. This unilateral action has caused losses estimated at Sh2.4 billion, with tea stuck at Port Sudan, on vessels en route or in warehouses in Mombasa," she said during the FKE Coast branch annual general meeting in Mombasa.
Mugo also criticized the 7,000 shilling cess per truck imposed by Mombasa County, saying it adds unnecessary costs to the tea value chain despite a court ruling declaring similar charges unconstitutional.
"This fee acts as a non-tariff barrier, in direct violation of the East African Community (EAC) trade protocols," she said.
She added that transit bond conditions imposed on tea from neighboring countries sold at the Mombasa tea auction are creating unfair trade barriers.
"These conditions create unfair trade barriers and risk undermining Mombasa’s competitiveness as a regional trade hub," Mugo said.
FKE wants the national government to step up efforts to protect regional trade, including through stronger preferential agreements and strategic engagement with key markets.
"This is particularly urgent considering the tariffs recently imposed by the US government and growing restrictions from other trading partners," Mugo said.
Some members in the tea and manufacturing sectors called on FKE to lobby for the creation of special economic zones to boost international competitiveness.
Others voiced frustration with government inaction and said they had lost faith in any tax relief being achieved without political change.
In a related concern, FKE called for more inclusive funding in education, urging the government to extend capitation to university-based TVET programmes.
"This undermines the development of a skilled workforce and contradicts Kenya’s industrialisation agenda," Mugo said.
Despite the challenges, Mugo noted positive growth in tourism and hospitality, crediting the recovery to post-pandemic strategies.
She called on the government to support this progress by easing visa rules and expanding air travel access.
