KISUMU, Kenya, May 10 — The government has handed over four public sugar mills to private investors in a bid to revive the country’s ailing sugar sector.
Agriculture and Livestock Development Cabinet Secretary Mutahi Kagwe hailed the process as transparent and in the best interests of cane farmers and factory workers saying it followed “broad-based consutations”.
He said that under the leasing agreement, the government cleared all arrears owed to cane farmers before the handover of the factories.
“Last year, the government disbursed Sh1.7 billion towards settling arrears owed to farmers,” said Kagwe.
Since then, Kagwe reported that the factories have accumulated an additional Sh500 million in arrears for cane delivered by farmers, which he said will be paid out in July.
He further noted that the government paid Sh600 million to factory workers last year, part of the total Sh5.3 billion owed to them.
“The amount owed to workers has now accrued to Sh5.6 billion, and after lengthy negotiations, we have reached a settlement plan with the workers’ union,” he said.
According to the CS, the four mills have been leased to private investors for 30 years following a rigorous public participation process involving leaders, farmers, factory workers, and other stakeholders.
Chemelil Sugar Factory has been leased to Kibos Sugar Factory, Muhoroni Sugar Factory to West Valley Sugar Factory, and Nzoia Sugar Factory to West Kenya Sugar Factory.
The South Nyanza-based South Nyanza (SoNY) Sugar Company has been leased to Busia Sugar Factory.
The handover process was completed on Saturday, with ceremonies held at all four mills across the country.
Resistance
This came despite opposition from Kisumu Governor Anyang’ Nyong’o, who criticized the leasing process as opaque.
Nyong’o claimed the handover of Muhoroni and Chemelil mills to private millers was done without sufficient consultation with the county government, farmers, and factory workers.
However, CS Kagwe, in a statement on the finalization of the process, said stakeholder engagement dates back to 2015.
“The procurement of the four firms follows a broad-based engagement with sugar sector stakeholders that began in 2015, when Parliament approved the leasing,” said the CS.
He assured the public that due process was followed and that the move to lease the mills represents a viable step toward reviving the struggling sector.
Kagwe also moved to allay fears that factory land would be sold under the leasing agreement, assuring stakeholders that all land and other property belonging to the state-owned mills would remain under government ownership.
He affirmed that the negotiated terms offer the best possible outcome for revitalizing the sugar industry.
