Cabinet exits earlier decision to privatise public sugar millers
By Noel.Wandera, August 9, 2023
The government has settled on leasing struggling public sugar factories in a bid to give them a new lease of life and give hope to cane farmers to earn from the crop.
Cabinet yesterday approved the revival and commercialisation of State-owned being; Nzoia Sugar Company, Chemelil Sugar Company, Miwani Sugar Company (In Receivership), Muhoroni Sugar Company (In Receivership), South Nyanza Sugar Company, and Mumias Sugar Company (In Receivership).
It said the decision sets the sugar sub-sector on a path of renewal by vacating the earlier decision to privatise State-owned entities within the sub-sector. If the proposal by Cabinet receives Parliamentary approval, the State-owned entities would be operated under a lease and operate framework.
This is the latest move by the government to turn around the fortunes of State-owned sugar factories, which are buckling under the weight of financial burden due to the influx of cheap sugar into the country, which authorities tried to solve through debt waivers and the leasing.
To address the high retail price of sugar fuelled by an acute shortage in the country, the Cabinet also sanctioned the extension of the framework for duty-free importation of milled sugar to bridge the supply deficit.
Currently, only factories within the southern sugar belt comprising Sony Sugar, Sukari and Transmara are milling sugar, after the Agriculture and Food Authority five months to allow regeneration of sugar cane. This has triggered a country-wide shortage of the commodity, leading to the prices skyrocketing because of lack of mature sugarcane for crushing by millers.
The crisis in the sugar subsector has been blamed on the chaotic operations of the sector following the repealing of the Sugar Act. The repealing moved the Kenya Sugar Board that was mandated to regulate the industry to AFA where it operates as a directorate.West Kenya Sugar Company said that the two months closure will be used to invest in farmers’ support programmes.