Cabinet vacates decision to privatise sugar mills
By Wycliffe Nyamasege, August 8, 2023
The government has formally dropped plans to privatise state-owned sugar mills following concerns from various stakeholders.
In a meeting chaired by President William Ruto at Sagana State Lodge, in Nyeri, on Tuesday, August 8, the Cabinet vacated an earlier decision to privatise the debt-ridden entities in a bid to save them from imminent collapse.
To boost the sugar sub-sector, the Cabinet considered and approved the programme for the revival and commercialization of State-owned Sugar Companies that were earmarked for privatisation.
The millers are Nzoia Sugar, Chemelil, Miwani (in receivership), Muhoroni (in receivership), South Nyanza Sugar Company, and Mumias Sugar Company (in receivership).
“Today’s decision sets the Sugar Sub-Sector on a path of renewal by vacating the earlier decision by Cabinet to privatize State-owned entities within the sub-sector,” the Cabinet said.
If the proposal receives Parliamentary approval, the firms would be operated under a lease-and-operate framework.
President Ruto hinted at dropping the plans to privatise the loss-making entities in April.
Speaking during the launch of the tarmacking of Malava-Kimang’eti-Ikoli road in Kakamega County, the Head of State assured residents that the government would inject capital into the firms to keep them afloat.
“I am not selling any State-owned company because it is making losses,” Ruto said.
He said the entities have debts of up to Ksh60 billion, which he affirmed would be written off.
Sugar prices
Meanwhile, to address the high retail price of sugar-fueled by an acute cane shortage in the country, the Cabinet on Tuesday sanctioned the extension of the framework for duty-free importation of milled sugar to bridge the supply deficit.
The Cabinet also considered and approved the proposal to revive and commercialize the National Oil Corporation of Kenya (NOCK).
“Under the proposed turnaround strategy, NOCK will benefit from a partnership that restructures it into three subsidiaries segmented around the petroleum products value-chain,” the Cabinet said.
The subsidiaries are NOC Upstream Limited, focused on exploration and upstream production activities and services; NOC Downstream Limited, focused on marketing and distribution of petroleum products; and NOC Trading Limited, specializing in holding strategic stocks of petroleum products for import and export.