Government to privatize Sugar companies

The Ministry of Agriculture has reiterated Governments commitments to privatize five sugar mills to make them more efficient.

Speaking at a Nairobi hotel during the official launch of the National Agriculture Summit, Agriculture Cabinet Secretary (CS), Peter Munya, said offloading of the sugar factories currently experiencing financial and management challenges will be carried out in the medium term.

The privatization of the facilities, he said, will be part of the 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

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

Early this week, a task force appointed last year to investigate the challenges facing the sugar industry handed over its report to President Uhuru Kenyatta. Uhuru assured farmers that the Government is keen to ensure local sugarcane farmers earn decent incomes from their crop.

“As leaders, ours is to ensure farmers get maximum returns from their sweat,” the President said as he received the report whose key recommendations included the re-introduction of the sugar levy, privatization of public sugar mills to enhance their efficiency and the enactment of the Sugar Act.

The sugar levy will be charged on consumers so as to raise the revenue needed to assist farmers to develop their sugarcane crop.

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.

Munya, on the other hand, observed that agriculture generates 26 per cent of Kenya’s Gross Domestic Product (GDP) and 65 per cent of the total exports.

On the issue of the locust menace that has been affecting the country, the CS admitted that pest control is a major challenge in agriculture and needs to be addressed.

However, he noted that the locusts’ invasion has been largely contained and remnants are now found in counties of Turkana and central Kenya, Kirinyaga and Nyeri.

“The only challenge we are facing right now is the eggs and nymphs from the locusts that have already hatched their eggs. National Youth Service personnel have been spraying chemicals on them,” remarked Munya.

The launch of the Agricultural Sector Network (ASNET) Association and Sustainable Development Goals (SDG) has provided for in the E-voucher program, where the private sector will sell directly to the farmers without middlemen being involved. A pilot project is running in Makueni for maize and coffee farmers.

Kenya Private Sector Alliance (KEPSA) CEO, Carol Karuga, said that the Association will bring farming communities and donors together to direct a common agenda in the sector.

“We are working strategically and issues are dealt with systematically and better. The private sector plays a big role in agriculture and the government’s role is with policy and regulations only,” remarked Karuga.

The two-day National Agricultural Summit is running under the theme “Building Partnerships for the Transformation, growth and Competitiveness of the Agriculture sector in Kenya”



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