MPs, Senators jostle over sugar levy beneficiaries
The entrance to Miwani Sugar Factory in Kisumu County.
Members of Parliament (MPs) and senators are locked in a fresh battle on who between the Kenya Rural Roads Authority (KeRRA) and counties should get a portion of billions of shillings that will be collected from sugar sales in a proposed law.
This week, senators passed the State-backed Sugar Bill, 2022 with fresh amendments that are set to put the Senate in a fresh battle with the National Assembly.
The Bill, which was introduced to Parliament in October 2022 by Navakholo MP Emmanuel Wangwe, introduces a four percent Sugar Development Levy on both domestic and imported sugar. While discussing it last year, MPs amended the original Bill by allocating 10 per cent of the money collected from the levy to KeRRA.
“Ten per centum shall be applied for infrastructural development and maintenance and shall be managed by Kenya Rural Roads Authority,” said the amendment made in September 2023.
However, senators this week amended the provision to knock off KeRRA and replace it with counties which senators want to manage the 10 per cent of the levy.
“That clause 38(6) be amended in (d) by deleting the words “and shall be managed by Kenya Rural Road Authority of the catchment area,” and substituting therefor the words “of county roads and shall be allocated to county governments as a conditional grant on a pro rata basis”, reads the amendment made by senators this week.
The amended Bill is now set to go back to the National Assembly, where MPs will deliberate on the senate’s amendments.
The Bill is part of sugar sub-sector reforms initiated by President William Ruto to revive the struggling sector that supports hundreds of thousands of farmers.
It seeks to reintroduce the Kenya Sugar Board to manage affairs of the sector, a role currently being undertaken by the Sugar Directorate which is a unit under the Agriculture and Food Authority (AFA).
According to the Bill, 15 per cent of the sugar levy shall be applied for factory development and rehabilitation, another 15 per cent will be used for research and training and 40 per cent shall be applied for cane development and productivity enhancement.
A further 15 per cent will be used for administration costs of the Board and five per cent will be used to help sugarcane farmers organisations.
Kenyans consumed about 1.17 million tonnes of sugar in 2023 with an average price of Sh205.1 per kilogramme, according to data from the Sugar Directorate. With the proposed four per cent sugar levy, the Sugar Board would collect in excess of Sh9.1 billion from the levy each year.
