Sugar sector advisers to be named in April

March 6, 2009

, NAIROBI, Kenya, Mar 6 – Consultants who will assist the government in privatising six sugar companies in the country will be known by the first of April, the government has said.

Agriculture Minister William Ruto told reporters on Friday that the government had already floated the tenders for consultancy as it prepares to bring in the private sector to manage the factories to enhance their competitiveness and efficiency.

“According to the Ministry of Finance, which is handling the tenders for the identification of the consultants, they should be on board by the first week of next month,” he revealed.

The Minister added that the consultants would then package each of the factories that include Chemelil, Sony Sugar, Nzoia, Miwani, Busia, and Muhoroni (which is under receivership) for privatisation, which is expected to be completed by 2012.

Mr Ruto said the advisers would also be expected to advice on how the government should go about writing off or converting the sector’s Sh47 billion debt into equity.

“To be able to make the privatisation exercise a success, we will take the advice from the transaction advisers but we are committed to addressing this issue,” he said of the loans that have crippled the sugar sector for many years.
The privatisation of the milling companies is one of the requirements that Kenya is expected to fulfil before the expiry of the COMESA protective measures in 2012, which will open up the market for competition from cheap sugar imports coming into the country.

The Minister spoke after flagging off four lorries carrying 113 tonnes of drought resistant and high yielding seedlings of assorted traditional crops, which would be distributed to 25,000 farmers in semi arid areas across the country.

Through the distribution, which is under the newly launched Traditional Food Security Crop Program, the government intends to diversify the country’s food crop base.

Mr Ruto said the seedlings, which also include 1.1 million cuttings of cassava and sweet potatoes are worth Sh640 million, and the beneficiaries would be required to give back two kilogrammes of sorghum or beans upon harvesting.

At the same time, Mr Ruto disclosed that the first consignment of 600,000 bags of imported fertiliser would be docking at the Port of Mombasa on Friday.

He assured that the government wants to ensure the availability of the commodity to farmers before the start of the planting season in the next two weeks.

“We have made elaborate plans to ensure that by Friday next week, we will have fertiliser in Busia, Nyanza and Rift Valley. We expect the planting season in these areas to start by the 20th of this month, by which time all the fertiliser will have been distributed,” he pledged.

The distribution exercise, he added, would also ensure that farmers are not exploited by middlemen who had in the past hiked the prices of the commodity to about Sh6,000.

The second consignment of 1.5 million bags, he said, would be in the country in the next two to three weeks.

With these imports, the Minister expressed optimism that the prices of fertiliser would come down to at least Sh2,000 from the current average of Sh3,000.

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