KENYA – President William Ruto has hit the reset button for 5 state-owned sugar millers with a total write-off of KES 117.64 billion (US$810.7m) debt the companies owed the government.
The state-owned millers are Mumias Sugar Company, Nzoia Sugar Factory, South Nyanza Sugar Company, Muhoroni Sugar Company, and Chemelil Sugar Factory.
The National Treasury had written to Parliament to approve the write-off of Sh117.64 billion owed by the five state-owned sugar millers as an immediate plan to revive and commercialize the ailing companies.
Already, the cabinet had approved a waiver of KES 83 billion (US$573.6m) in debt owed to the Agriculture and Food Authority (AFA) by state-owned sugar millers.
The amount is said to have accumulated through unremitted Sugar Development Levy payments, which were being charged at 4 percent of the ex-factory value of locally manufactured sugar before it was scrapped in 2016. The millers’ financial downturns resulted in defaulting on payment.
“I promise the people of this country that I will write off all debts amounting to Sh117 billion facing our factories. We have passed in our cabinet to write off the debts and the matter is before the national assembly. I know in the next few weeks the legislators will have to write off the debts as the first step so that I can plan well on the issue of sugarcane,” said Ruto.
“We have to sort out the issue of sugar because it affects and touches the majority of Kenyans and that is what we are doing currently.”
The President also promised to reform the sugar sector by declaring that he would personally deal with sugar cartels.
In addition, he reiterated that no public sugar factory would be privatised stating that the millers would only undergo leasing in order to improve their performance.
As part of the performance improvement, Nzoia Sugar company received two newly modern purchased crushing machines that are poised to stabilize the operations of the sugar factory and improve its crushing capacity.
Meanwhile, Kakamega Governor Fernandes Barasa lauded the government for the move, saying the upcoming sugar conference will seek to solve 90 percent of the problems facing the sector.
“We want to assure the president that as leaders, we will support him in reviving Mumias factory and the cane sector at large. Our farmers, especially those who used to take their cane to Mumias, have suffered a lot and we welcome the decision to revive the bedridden Mumias factory and the cane farming by writing off debts,” said Barasa.
Currently, the sugar millers in the Western sugar belt have shut down operations to allow for cane regeneration after the country suffered an acute shortage.
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