Kenya Farmers Association (KFA) lost Sh64.8 billion in missed business opportunities between 2007 and 2009, a financial consultant hired by the firm to audit its accounts says.
Bills Consulting Agency, in a report, says KFA, which was registered as a cooperative society in 1923, failed in its mission to supply farm inputs among other obligations during the years in review due to financial woes it is facing because of years of mismanagement and political interference.
Apart from supplying farm inputs, the association, which is now a limited liability, provided farmers with subsidised farm implements including tractors.
It also produced wool for local and international use from hundreds of thousands of merino sheep it reared in several of its farms in various parts of the country.
“As at June 2007 KFA, then known as farmers supermarket, lost Sh3.58 billion in bulk of business opportunities. The figure rose to Sh2.9 billion in 2009 when last auditing was done,” the report says.
In a proposed financial restructuring report to EcoBank in 2009, the consulting firm proposed it lends the farmers association Sh700 million to settle National Bank of Kenya’s and Barclays Bank’s loan of Sh600 million. Working capital The remaining Sh100 million would be used as working capital to jump start stalled operations.
Part of the facility of up to Sh300 million, the report further said, would have been retired through sale of non-core assets while the rest from operations of a period of three to five years.
The disposal process, the consulting firm added, would be undertaken jointly with EcoBank upon valuation and economic considerations.
KFA recovering recommendations include transfers of all its accounts to various branches of the bank, the association to submit regular, preferably quarterly management reports to the bank and board of directors of the association to consider calling an annual general meeting to make shareholders aware of the new developments.
Other rescue plans include streamlining shareholding and requesting the shareholders to inject more capital into the company through new share issuances.