Betrayal in Mumias: A short, sad story

To get votes in Kakamega County, a politician just needed to come up with a "revival plan for Mumias Sugar Company" and shout about it out in public gatherings, including funerals.

Once in office, these grand plans — many of them unrealistic — would be shelved until the next election. And it is not just the local politicians. Both the Grand Coalition Government (2008 - 2013) and the subsequent Jubilee administration made numerous promises to keep Mumias afloat, but when the time came to act, they only did enough to keep it alive in the economic intensive care unit until they got votes and then vanished. Until KCB took over the iconic company recently, the apparently empty promises continued.

RECEIVERSHIP

“We are keen on reviving the sugar company because we know it will benefit farmers. We strongly believe that it will support the economy of Western region. This has nothing to do with politics,” said President Uhuru Kenyatta in a statement that still sits on the State House website alongside a proposed revival strategy that has remained on paper.

The Head of State said this when he met 25 members of Parliament from Western Kenya after discussing a "four-point" turnaround strategy for the miller. It wasn’t the first commitment he was making — there was an earlier ill-fated bailout.

Then there is Deputy President William Ruto. Hardly any visit to the region passes without talking about Mumias. From 2016 to just before the company was put under receivership, Mr Ruto, who was once minister for agriculture, has spared no promise on how to turn it around.

“We have a programme that has already gone through Parliament to work with the farmers in turning around the fortunes in the sugar industry, including Mumias. We are going to have a joint sugar board with Uganda to ensure that no cheap sugar from other countries is dumped into the Kenyan market,” Mr Ruto said during one of his visits.

MUTILATED

The opposition, led by ODM’s Raila Odinga, Kalonzo Musyoka of Wiper, Musalia Mudavadi of ANC and Ford Kenya's Moses Wetang’ula, was also in the mix ahead of the 2017 elections. They used the woes of the factory as a platform to chide the Jubilee administration, but never rallied their members of parliament when it most mattered on the floor of the House.

But perhaps the firm’s biggest betrayal by politicians came in August last year, when MPs, including those from the sugar cane-growing areas, absented themselves from the National Assembly when the time came to vote on a crucial report affecting the sector came.

The report, it was hoped, would give Mumias and other sugar firms a temporary reprieve and cause the investigation of the people who brought down the millers.

After a night of lobbying and private sessions, names were removed from the report and some recommendations edited out.

In the end, a mutilated, tame document was tabled, and there were allegations of MPs having been bribed.

FLOODGATES

“What are they going to tell their people when they come home?” wondered Kakamega Governor Wycliffe Oparanya at the time. "They are a big disgrace to the sugar cane farmers and have betrayed the revival cause of the sugar cane belt.”

Mr Oparanya was shocked that MPs from the sugar cane-growing zones did not join hands to defeat the motion seeking to throw out the report.

It also opened the floodgates for importation of sugar, taking away the only remaining fighting chance for the five millers that are chocking under a combined Sh70 billion debt.

Among the conspicuously missing were those who got to parliament by selling their vision on how they would revive Mumias Sugar Company.

Others chose to abstain or just go with the flow despite the importance of the matter on the floor of the House on their constituents and despite having gobbled up millions of shillings in sitting allowances for sessions.

LIVELIHOODS

One of its chief executives who bore the brunt of the betrayal was Australian Eroll Johnson who, faced with a dying company amid empty promises, chose to flee.

“To keep generating funds, we had to continue operations, by bringing cane forward. It was at this time I began to believe that if the funds were readily available from the time of the first tranche release, the GoK (Government of Kenya) was not serious about recovering MSC. I resigned on June 24, 2016, as a result of the funds not being disbursed in a timely manner,” Mr Johnson wrote.

Mumias Sugar Company, for decades, sustained the livelihoods of thousands in the western Kenya town named after paramount chief, King Nabongo Mumia. Cane harvesters, loaders, drivers, farm workers and business people had money throughout the month during Mumias's heyday, when the factory was roaring and the region’s economy was flourishing.

Most of the businesses in Mumias and its surrounding areas depended on the sugar factory.

But from 2013, life started changing, as operations in the biggest sugar factory in East and Central Africa began slowing down and finally ground to a halt.

PLUNDERED

Accusing fingers were pointed at politicians, local leaders and businessmen who deliberately and systematically plundered the sugar miller.

“People who tore Mumias Sugar into pieces and feasted on it like hyenas are well known. There are those who indirectly benefited from the miller without working or delivering any service but due to political connections,” said a resident, Josephat Olutiali.

Mr Olutiali blames this on the lack of political goodwill from the top government leadership and a weak legal framework deliberately put in place by the company's board and top management.

“Even State House is aware of the happenings that led to the collapse of Mumias,” said Mr Olutiali, who accuses government officials of failing to listen to the cries of Mumias farmers when the factory started facing management challenges.

Mumias is partly owned by the government through the National Treasury, with a 20 per cent stake, and was the largest shareholder corporation in other 10 companies.

Athman Wangara, a businessman in Mumias, says the rain started beating the miller when the management decided to supply poor seed cane, poor fertiliser, fake herbicides and overcharging farmers for farm inputs and transport.

MALPRACTICES

“Poor extension services sometimes led to flawed lease contracts, a poorly calibrated weighbridge, cooked figures that never reflected the reality on the ground and knee-jerk management decisions. A flawed reward system that saw employees rewarded based on ‘technical know-who’ instead of know-how led to the loss of interest in cane farming,” said Mr Wangara.

He cited a case where the late William Wambani, who was regarded as the most hardworking farmer, got rewarded with a wheelbarrow and a bag of sugar while the sugar distributors were rewarded with pickups and lorries.

The residents accuse politicians of failing to play their oversight role in the running of the company but instead jostling for handouts, contracts and other malpractices.

“Politicians from Western earned monthly stipends plus free sugar supply from the factory. It therefore disturbs me to keep singing the praises of a political leadership which, throughout its tenure, has presided over the collapse of key institutions like Mumias Outgrowers Company, Mumias Savings and Co-operative Society and Mumias Sugar,” said Mr Wangara.

Musa Ekaya, secretary-general of Bunge la Haki, a civil society lobby in Kakamega County, said that the only persons who can ensure that Mumias is up and running are the President and the Deputy President.

TUNE CHANGED

"But, unfortunately, leaders only think of the lives of the common mwananchi during elections, and so the songs about reviving Mumias will hit a crescendo in 2022,” he said.

Mr Ekaya wonders what the leaders from Western who talk with President Kenyatta and DP William Ruto tell them.

The activist said the local politicians have betrayed the people by failing to table reports about the mismanagement of Mumias Sugar Company in parliament or refusing to support motions to discuss the challenges facing the sugar industry.

In the campaigns in the run-up to the 2017 General Election, the President and his deputy gave out Sh500 million as part of the revival plan to the cash-strapped miller, promising to release more money to address its financial woes. After the elections, the tune changed, with the duo saying that the government was disappointed after pumping in bailouts without returns "due to incompetent management."

PRIVATE ACCOUNTS

The government has, since 2013, pumped close to Sh3.7 billion into Mumias Sugar.

The county government has also come under criticism despite its decision to pay Sh200 million to farmers contracted by Mumias in the 2014/15 financial year, whose payments ended up in a private company account.

So far, Sh168 million has been returned to the county and Governor Oparanya says his administration will plough it back to help the farmers.

On September 20, Mumias was put under receivership by KCB after it failed to pay a Sh12 billion debt.