Government is ready to surrender its stake in five sugar factories in the country


The Government is ready to surrender its stake in five sugar factories in the country as a measure to streamlining the management of the sector, Deputy President William Ruto has said.

Mr Ruto said the Government was looking into ways of expediting privatization of Miwani, Muhoroni, Nzoia, Sony and Chemilil sugar factories.

“We have to make changes to the model we are using to manage the sugar sector. We have no problem even if it means we surrender our stake in the sugar factories, so long as it will be for the benefit of the sugarcane farmers,” said Mr Ruto.

Speaking during a consultative meeting on the privatization of sugar factories, held at his Karen office, Nairobi, on Wednesday, Mr Ruto said the manner in which the factories were being run, calls for the reenergizing of the management of the sugar industry.

The meeting brought together Governors from the sugarcane growing areas, officials from the Ministries of Agriculture, Lands, Devolution, Treasury and the National Lands Commission.

The Deputy President said decisions must be made on how to better manage the sugar industry for the sake of sugarcane farmers.

“With a situation where private companies in the sugar industry are making money while the public ones are making loses, shows that there is a problem somewhere which must be fixed,” said Mr Ruto.

Cabinet Secretary Mwangi Kiunjuri (Agriculture), Governors Okoth Obado (Siaya), Stephen Sang (Nandi) and Paul Chepkwony (Kericho), Privatization Commission chairman Henry Obwocha and his National Lands Commission Counterpart Muhammad Swazuri were present.

Mr Ruto asked the stakeholders working on the privatization programme to consult farmers so as to give their views on how the sector could be well managed.

He said a meeting of leaders should be held before embarking on consultations based on individual factories, saying the management of each factory has its own challenges and the way it could like them addressed.

“Consultations should be done on individuals factories so as to get views on how each one of them wants issues affecting it addressed,” said Mr Ruto.

The meeting also heard that the five-sugar companies debt as at the end of December last year, stood at Sh 89.3billion.

The committee urged the Government to write off the debts owned by the public factories.

Mr Obwocha said his commission has proposed that the National government expeditiously agrees with the respective county governments on the 25 percent shareholding approved for the retention in order to move the process forward.

“There is need to address issues raised by Kisumu Governor Prof Anyang Nyong’o on behalf of the respective Governors on debt cancellation and injection of fresh capital to revitalize the factories before privatization,” said Mr Obwocha.

The meeting also resolved to allow those factories, which were ready to embrace privatization to do so.

Governor Chepkwony said the concerned counties were fully in support of the privatization of the sugar industries.

“Those factories, which are ready for the privatization process should go ahead,” said Governor Paul Chepkwony.

Mr Kiunjuri said public participation would be held to educate the framers on the importance of the privatization of the factories.

Governor Obado took issue with the private sugar factories, saying they were stealing sugarcane from farmers.

He expressed fears that privatization will discourage sugarcane farmers, warning that they might be forced to opt out of the venture.

“There are no success stories under private mills in our country. Farmers are crying and we should not leave them at the mercy of private mills,” said Mr Obado.

Governor Sang expressed concern that mismanagement was to blame for the collapse of sugar industries in the country.

 “I wish to agree with this committee that issues affecting each sugar factory are different and need to be addressed differently,” said Mr Sang.

Mr Ruto asked Mr Obwocha in consultation with the relevant departments to roll out a programme to sensitize leaders and stakeholders at the factory level to generate consensus necessarily to expedite the process.