Let Munya pledge be followed by arraigning barons
By People Daily, July 27, 2020OMULO OKOTH
The sugar industry may soon be rising from its ashes. Agriculture Minister Peter Munya’s recent announcement on the state of sugar factories could not have come at a better time.
The government, said Munya, has waived Sh62 billion debts that owed by the ailing sugar factories across the country.
Some sources report the debts are around Sh90 billion, which include long overdue loans, taxes and penalties due to the government and Kenya Sugar Board.
This announcement has struck a chord with the 10 million people whose livelihood depends on this sector.
Critics who never saw any government announcement they did not want to oppose, have gone for the jugular.
They are ranting about the politics of ‘handshake’. They are pointing at the absence of this item from the recent budget.
But this is a government decision, a policy statement by a CS. In the fullness of time, it will have to be implemented. Therein lies the crux of the matter.
The story is very well known. The (sugar) industry has been stifled and captured by sugar barons who profit from cheap sugar imports wrapped in local factories’ branded paper.
Rapacious managers have literally brought these sugar companies to their knees.
Some of the culprits are walking freely, enjoying the loot, while others are occupying lofty political offices and are untouchables.
Nzoia Sugar Company Limited, for instance, had a debt of Sh 11 billion. Sony Sugar, formerly managed by Mehta Group and later briefly by Booker Tate, owes Sh6.2 billion.
It had its ban accounts frozen last year because of the Sh92 million Sacco debt. At the time the Cooperative Bank account was frozen, it owed farmers Sh552 million.
Employees of these millers have gone without salaries for close to a year. Farmers and suppliers are owed millions of shillings, bringing economic activities around these millers to zero.
Chemelil Sugar owes the government Sh6.1 billion, while Muhoroni owes Sh25.1 billion.
Mumias Sugar, formerly the paragon of a well-managed sugar miller, owes Sh4.8 billion.
Muhoroni Sugar owes Sh25.1 billion. All these companies have nucleus estates from where they obtain cane.
Yet privately owned sugar millers like Ndhiwa and Trans-Mara, who only buy sugarcane from contracted and non-contracted farmers, appear to be doing well. What is this magic they use to run their companies to profitability?
The debts that hang around the necks of millers like domacles have stifled their progress. Miwani and Muhoroni are already under receivership.
Yet even with these debts, sugar barons still imported cheap sugar from countries like Egypt and Brazil, packaged them in local brands and flooded the local market.
They raked in huge profits when the millers, wittingly or unwittingly, went down, some irretrievably.
It was with this in mind that the public, especially from sugar growing zones of western Kenya, received CS Munya’s pronouncement with excitement.
With Sony facing imminent collapse, some local millers are buying sugarcane at much less than the market rate, which ranged between Sh3,600 and Sh4,200 a ton.
They are paying farmers up to Sh2,300 per ton, which is grossly unfair, after they spent money on cultivation, fertilisers, labour, transportation and such like expenses.
Economy of surrounding satellite towns like Awendo, Round About, Shibale, Kanduyi, Kibos, Kibigori etc long grounded to a halt.
The Government must come down hard on those culpable sabotaging these companies and charge them with economic crime. – The writer is a veteran journalist, and syndicated writer who comments on topical issues