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President William Ruto yesterday defended the Sh150 million bonus awarded to cane farmers in Mumias, asserting that it resulted from improved business operations rather than State funding.

He attributed the bonus to better management of the factory, which has enhanced efficiency and profitability, signalling a shift away from earlier plans to privatise the firm.

“This is due to improved sugar production and sales proceeds,” Ruto clarified in Mumias.

He expressed optimism that the bonus could double next year, reflecting confidence in the ongoing recovery of the sugar industry.

Suspension from NSE

This development offers a glimmer of hope to the 130,000 investors whose investments in Mumias Sugar shares have been frozen since the company was indefinitely suspended from trading on the Nairobi Securities Exchange (NSE) in 2020. The suspension arose from financial troubles and loan defaults.

“If Mumias Sugar can pay farmers bonuses, why again is it suspended from trading at NSE?” a broker questioned, reflecting the sentiments of investors.

This follows Kenya Airways’ recent resumption of trading on the NSE after a four-year suspension. KQ’s suspension had locked in over 77,000 retail investors, pending what was initially anticipated to be a quick buyout by the government through a nationalization plan.

The lifting of the suspension, the NSE says, is on the back of the withdrawal of a proposal to also nationalise the airline, as well as its improved performance.

“The suspension on the trading of Kenya Airways PLC shares was lifted following the company’s recent performance which saw the company record a profit after tax and the withdrawal of the National Aviation Management Bill 2020,” NSE said in a notice.

Surge in sugarcane production

Speaking in Mumias, President Ruto also highlighted the government’s achievement in writing off Sh117 billion in debts that had burdened the sugar sector for decades. He noted significant progress at Mumias Sugar, where 90 per cent of the nucleus land is now under sugarcane cultivation.

Kenya’s sugar production hit a historic high last year, with 832,000 metric tons produced, while 42,000 new acres were brought under cultivation. The government plans to expand this by another 200,000 acres to reduce reliance on sugar imports and address production deficits.

Regarding privatization, Ruto explained the government’s decision to abandon the exercise in favor of strategic management aimed at retaining public ownership of sugar mills. This approach seeks to revitalize state-owned mills and make them profitable. He pointed to Mumias Sugar’s progress, including the issuance of bonuses to farmers, as evidence of the strategy’s success.

Sony Sugar has also reported positive results under the new management framework, posting a pre-tax profit of Sh113 million—the first in 14 years.

Ruto emphasized that other factories are expected to follow suit in rewarding farmers, attributing the improvements to strategic reforms.

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