Sugar belt leaders, investors laud Uhuru’s bailout

A section of leaders and stakeholders in the sugar industry have lauded President Uhuru Kenyatta for directing the Treasury to disburse Sh1.5 billion to bail out indebted sugar factories.

The President issued the directive during Mashujaa Day celebrations in Kirinyaga County on Wednesday.

Leaders from Nyanza said the money would cushion the factories from a myriad of challenges that have weighed them down over the years.

The money will be spent on factory maintenance and paying farmers’ arrears. This, the President said, will safeguard the livelihoods of sugarcane growers.

Kisumu Governor Anyang’ Nyong’o welcomed the good news, saying the money will tackle immediate problems such as payments to farmers and workers, and for factory repairs.

“As for the long term, issues must be tackled with the urgency they deserve. Priority must be the leasing of the sugar factories in line with the Governor Wycliffe Oparanya Report. This needs to be done by May 2022, well before the elections,” he said.

Dr Nyong’o and his deputy Mathews Owili believe that implementing the task force report spearheaded by Agriculture Cabinet Secretary Peter Munya and Governor Oparanya (Kakamega) would save the millers and the livelihoods of farmers and locals.

While Richard Ogendo, secretary-general of the Kenya Sugarcane Growers Association, thanked the President for the gesture, he pointed out that the challenge remains making sure the funds are used for the intended purpose.

He told the Nation that farmers who deliver cane to government-owned factories are pleased as these plants have operated with dilapidated machinery, reducing productivity.

“However, this time we must be vigilant because in the past funds have been allocated for factory rehabilitation and have been misused or underutilised,” Mr Ogendo said.

He called upon the head of the Sugar Directorate to closely monitor this process by forming an inspection team that will reassure farmers that the funds will be safe.

Some of the State-owned millers in the region are Sony Sugar, Chemelil, Muhoroni and Miwani, all crippled by debt. Though the issue of rescuing the companies is discussed every election season, it has not gone away.

At the Lake Region Economic Bloc summit meeting in January this year, sugar-belt governors asked the government to implement the recommendations of the sugar task force report, saying the process has been slow since 2018.

In particular, they want the Sugar Bill expedited in Parliament and the correct version of the Sugar Regulations gazetted.

Mr Oparanya, who read the resolutions at the summit, claimed the national government had started implementing the proposals of the task force, but those efforts were hampered by court cases sponsored by cartels in the sugar industry.

More than four court cases have stalled the process, with farmers and other stakeholders saying some millers and organisations were delaying the process.

The five factories that have been put up for lease are Chemelil, Muhoroni, Miwani, Sony and Nzoia.

The leasing was advertised in July 2020 through the Agriculture and Food Authority, with the lease period put at 20 years. It attracted 29 investors, including two firms linked to tycoon Jaswant Rai - West Sugar Company and Sukari Industries.

Litigation has stalled the lease process, which was supported by a majority of farmers and stakeholders in the sugar sector.

Although Chemelil and Muhoroni are crushing cane, Miwani is still dormant while the other two are not working optimally and still have old machines.