Kenyan government set to embark on privatization of sugar companies

KENYA – The Kenyan government plans to privatize five sugar mills currently experiencing financial and management challenges in a move to make them more efficient.

The government-owned sugar mills include Chemelil, Miwani, Muhoroni, Nzoia and SONY sugar companies.

According to Agriculture Cabinet Secretary (CS), Peter Munya, offloading of the sugar factories will be carried out in the medium term and will be part of the country’s agriculture transformation strategy.

“Our aim as the government is to make the factories more efficient and thus contribute to sugar production in the country. Our resolve is to reduce resources wastage and thus enhance farmers’ income base,” he said.

Every year the CS added, Government allocates substantial budgetary resources to finance management of the sugar mills, but nothing meaningful has so far been achieved.

“Sale of the factories supports Government commitment to reduce wastage of extended resources. Our intention is to bring on board strategic investors in order to offer new management styles and save the country and farmers substantial resources,” added Munya.

The sale of the sugar mills he explained will not be done under the rigorous process as subscribed under privatization commission strategy.

“Our intention will be legal but will not follow the privatization commission route as the same might take longer than expected,” he said.

However, Munya explained that the government will fast track a more farmer-investor oriented strategy which will offer quick results.

This comes days after the Kenya National Sugar Task Force, appointed to examine what ails the sector for the sake of a revival presented the Sugar Taskforce report to President Uhuru Kenyatta.

The team, co-chaired by former Agriculture Cabinet Secretary Mwangi Kiunjuri and Kakamega Governor Wycliffe Oparanya was set up on 8th November 2018.

They made recommendations which include the re-introduction of the sugar levy, privatization of public sugar mills to enhance their efficiency and the enactment of the Sugar Act.

Other proposed reforms include the gazettement of the sugar sector regulations including import rules, amendment of the AFA Act and Crops Act in line with the 2010 Constitution, and a review of the taxation regime in the sector to enhance investor incentives.

The taskforce also proposed strict compliance with the COMESA regulations and outlined a raft reforms needed to increase the sugar sector’s productivity.

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