The government has announced the temporary closure of five sugar mills in the western region, effective July 11, 2025, for three months.

According to a notice by the Kenya Sugar Board (KSB) dated July 7, 2025, the closure targets key millers in Western Kenya, including Nzoia Sugar Company, Butali Sugar Mills, West Kenya Sugar Company (and its Olepito and Naitiri units), Mumias Sugar (2021) Ltd, and Busia Sugar Industry Ltd.

This directive comes as the newly enacted Sugar Development Levy (SDL) takes effect, marking a coordinated strategy to rebuild the sector and phase out sugar imports by 2027.

Sugar Board Chief Executive Officer (CEO) Jude Chesire stated that the decision was reached following a stakeholder consultative meeting held on July 4 in Kisumu, which confirmed an acute shortage of mature sugarcane in both regions.

According to Cheshire, the shortage, attributed to inadequate cane development planning, has resulted in widespread harvesting of immature cane and a significant decline in sugar production during the first half of 2025.

“This suspension will allow sugarcane to mature and enable a reset in cane supply planning. We will also conduct a cane census within two months to better assess field readiness ahead of resuming operations,” said Chesire.

Furthermore, the Board has directed all millers to intensify cane development to ensure a sustainable supply of raw materials in the future.

Sugar Development Levy

The Sugar Development Levy (SDL), which came into effect on  July 1, 2025, charges sugar importers and millers a  4 percent levy on the ex-factory price of locally produced sugar and the Cost, Insurance, and Freight (CIF) value of imported sugar. 

Similarly, the Kenya Revenue Authority (KRA) has been appointed as the official collection agent, with all levies due by the 10th of each month following production or importation. KRA is expected to issue detailed compliance guidelines soon.

The National Treasury has also approved the transfer of the Sugar Development Fund from the Commodity Fund to the Kenya Sugar Board to enhance transparency, credit discipline, and effective sector reinvestment.

Speaking during a public participation forum on July 10, 2025, in Kisumu, Cheshire stated that the board projects a collection of Ksh5 billion annually, with Ksh2 billion allocated toward the cane development program, Ksh600 million toward road rehabilitation in sugar zones, and Ksh600 million toward research and innovation.

Similarly, Ksh600 million will be allocated towards factory modernisation, Ksh200 million towards strengthening farmer institutions, and 10 percent towards administrative functions under the Sugar Board.