Counties in western Kenya have backed the government’s plans of leasing public-owned sugar mills, signalling a smooth process to the exercise after they opposed a previous bid of privatisation.
In a public notice, Kakamega Governor Wycliffe Oparanya and his Kisumu counterpart Anyang Nyong’o said the move will boost sugar production and increase income for farmers.
Governors have been against disposing of the mills to investors and successfully placed a court injunction, which delayed the process that ought to have been completed some years back.
“The leasing of sugar mills will inject fresh investments into the mills, leading to higher productivity and subsequent employment of more workers as well as steady farm-gate prices. This will no doubt guarantee tremendous increase in sugar production for both local and export markets,” said the two governors in a joint statement.
SH62 BILLION DEBT
The Privatisation Commission had initiated the process of selling Miwani, Muhoroni, Nzoia, Chemelil and Sony sugar companies to investors, where so far millions of shillings have been involved with little to show for it.
Governors through their Lake Region Economic Bloc also lauded the decision to write off a Sh62 billion debt that millers owe the state. They also welcomed the move to reintroduce the Sugar Development Levy, arguing it will ensure farmers, county governments and factories get a steady source of finances that will support farm development and building of appropriate infrastructure.
Agriculture Cabinet Secretary Peter Munya said the long leases of state-owned firms will help increase farmers’ income, enhance competitiveness and service delivery in the sugar sub-sector.
“Through comprehensive reforms, the government is determined to facilitate a multi-purpose sugar-cane industry that is efficient, diversified and globally competitive,” said the CS.
Mr Munya last week banned sugar imports with immediate effect and suspended the trading licences that are valid at the moment in order to curb influx of cheap sweetener in the domestic market, which has impacted negatively on farmers’ returns.
He said the imports had rendered Kenya’s mills uncompetitive because they are very cheap compared with the locally produced sugar.
Imports in the first five months of the year rose 21 per cent compared with a similar period last year, even as local production in the past two recorded a slight improvement.