I share in Raila’s frustration on sugar sector reforms, but then he can act

I wish to support Raila Odinga’s frustration at the fact that the long-awaited privatisation of our moribund sugar factories has been delayed once again. As he knows all too well, large sections of the Nyanza and western Kenya population are dependent on the Nzioia, Muhoroni, Sony, Chemelil and, of course, Mumias factories. They live in a sea of poverty since the old and decrepit factories are, literally, at the end of their lives and struggle to produce even a modicum of sugar.

Let us look at it from the positive side, that if these factories were rehabilitated and well run they could help to make this country self-sufficient in sugar production as well as provide gainful employment to vast numbers of the people residing in those areas.

We have waited for donkey years and, obviously, the latest ruling by the Employment and Labour Relations Court halts, once again, this endless journey. But I urge Raila to take a broader and more holistic view of the situation; the process is more complex than meets the eye.

In theory, the aim was to ask competent, professional and qualified international sugar-growing companies, local and international, to bid for the management of these setups. There are a number of entities that professionally manage sugar companies; so, I emphasise that the bidding be global.

Political sinecures

Remember, these factories have been treated like political sinecures in the past and run accordingly. The political players used them as sources of patronage and favour rather than as sugar producers. They had been frequently bailed out by government — which was akin to throwing good money after bad.

We got the reputation of producing some of the most expensive sugar in the world in the most inefficient manner. So, it was absolutely vital that we followed this process to the letter. Agriculture Cabinet Secretary Peter Munya started out well. Where it went awry was, the process was started when much of the world was in lockdown or confined by travel restrictions and so on due to the coronavirus.

Some of those international entities that could be interested to physically get involved in the process by, for example, evaluating the situation on the ground, could not. Even the opening of the bids had an air of opaqueness about it; it is unclear which international players partook in this process.

Fiercely competitive

Let us just remind ourselves that the international sugar production business is fiercely competitive. Kenya is the veritable laggard. We have been cushioned by Comesa safeguards for years. That will not be the case soon and, remember, we have the African Continental Free Trade Agreement (AfCFTA) kicking in. We must get competitive or sink.

I urge Mr Munya to urgently review the privatisation, taking into account the grievances raised in court and my points, and extend it so that we have a watertight and transparent international process for the best results.

I also urge Raila to support this approach. After all, getting a better livelihood for hundreds of thousands, running into several million, people in Nyanza and western regions is smart politics. It’s a question of using the resources more productively and stop squandering them, as has been done for years.

* * *

I recently visited Makueni County.  As I have observed in the past, if anybody wants to see how Governor Kivutha Kibwana runs a tighter and more accountable ship than many of his fellow governors, go there.

There are two simple reasons for this. Prof Kibwana has his hands on the steering wheel and is more dedicated to the ethos of development. He is also more transparent than most and, as such, Makueni attracts generous development money as donors and financiers can see meaningful results and get value for the money given or lent.

I was overlooking a river and was told a dam will be constructed on it to provide irrigation water to what is a dry and barren area.

I tend to be cautiously cynical when told such things. But, in this case, I am less so.

Mr Shaw is and economic and public policy analyst:[email protected].