Iran Considers Lifting Ban on Tea, But Wants Jail Time for Some Kenyans

The government has initiated talks to lift a ban on Kenyan tea to Iran, potentially unlocking a Ksh8 billion market to benefit farmers following years of blackout derailed by a Ksh168 billion scandal involving the export of substandard tea. 

On Thursday, Agriculture CS Mutahi Kagwe met Iranian business groups to deliberate on lifting the current ban. The discussions also focused on exploring expanded trade opportunities not only with Iran but across the broader Middle Eastern and Central Asian regions.

“Reopening access to Iran’s robust market could be a game changer for tea farmers and the entire tea value chain,” he said.

A highly placed source at the Ministry exclusively told Money254 in confidence that bad blood between the two nations is anchored on claims that some Kenyans sold low-quality tea valued at Ksh168 billion (US$1.3 billion). 

Separately, another report showed that until 2020, Iran’s annual budget for importing tea was around Ksh37 billion ($300 million), but the budget tripled to approximately Ksh98 billion ($900 million) without any proper justification. 

One company at the center of the scandal, which received Ksh368 billion ($3.37 billion) in foreign currency from the Iranian government on a preferential exchange rate for tea and machinery imports from 2019 to 2022, reportedly sold the low-quality product to Iran. 

“The company also sold low-grade tea imported from Kenya as high-grade tea originating from India, with a Ksh 1,310 ($12) difference per kilogram. The company has also been involved in what has been described as fraud by re-importing cheaper Iranian tea and pocketing the difference in foreign currency,” an Iranian media outlet reported in 2023.

The scandal led to the dismissal of 60 senior Iranian Government officials in a purge that the then Iranian government spokesperson Ali Bahadori Jahromi confirmed included other graft offenses the perpetrators had engaged in.

‍Jailing Kenyan officials.

Our source, however, estimated that 66 Iranian officials have been jailed since the scandal broke. The source further speculated, "They (Iran) want Kenya to take action against Kenyans who perpetrated the scam."

Kenya has remained a major black tea exporter across the globe, and in 2023, it was ranked the second largest exporter of the product, with a huge chunk landing in Pakistan, Egypt, the UK, the UAE, and Yemen.

Kagwe, therefore, seeks to restore tea export deals across the Middle East and Asia.

‍Sudan Ban

The potential deal with Iran presents great hope for tea farmers, especially after Sudan, in mid-March, announced that it would not import Kenyan products, including tea and coffee. 

The Sudanese government accused President William Ruto's government of hosting the Rapid Support Forces (RSF), a rebel group that wants to topple the current government. 

The ban dealt a blow to the agricultural community since Sudan imported Ksh4.7 billion ($37 million) of tea in 2022, Ksh3.9 billion (Ksh29.9 million) in 2023, and Ksh2.3 billion ($18 million) in 2024. The drop was attributed to the ongoing war.

On April 1, Ruto claimed that the market forces had forced Sudan to resume the import, saying, "We sell tea today to Sudan, so there is absolutely no issue about selling tea, and that is why we are making money in the tea sector.” The statement was immediately denied by the Sudanese Government. 

‍Murky Iran Ties

In recent years, Kenya has found itself in unfamiliar territory on whether to carry on with Iranian ties and risk offending the US, which has sanctions against Tehran. 

Earlier reports indicated that as of March 2020, Kenya was receiving imports worth Ksh15 billion from Iran while exporting Ksh3 billion of tea and coffee per year.

By December of the same year, the country resolved to continue working with Iran despite US threats to impose sanctions against countries trading with Tehran. The US had pulled out of a nuclear deal with Iran at the time.

Then CS Monica Juma justified the partnership, noting, "We do not take instructions from other countries, we know what our interests are and that is what we are sticking to."

The US has continued to sanction entities trading with Iran, the latest being China-based terminal operator Guangsha Zhoushan Energy Group Co Ltd, which suffered the fate on April 10, 2025, after it received crude oil from Tehran.