This archive report was first published on 11 July 2020.
Kenya's Government Offers Five Sugar Companies for Lease ¶
On July 1, 2020, President Uhuru Kenyatta held a private meeting with leaders from Western Kenya, including Devolution CS Eugene Wamalwa, Council of Governors Chair Wycliffe Oparanya, and COTU Secretary General Francis Atwoli. This meeting led to the government's decision to lease five sugar companies: Miwani, Muhoroni, Nzoia, Chemelil, and Sony.
The government has resolved to lease these companies for 25 years, with the aim of increasing farmers' income, enhancing competitiveness, and improving service delivery. Qualified investors have been urged to make bids to run the firms and hand them back to the government after 25 years.
Investors will be tasked with modernizing the factories, ensuring efficient management, and returning the companies to profitability. To attract investors, the government has decided to write off a Ksh62 billion debt that millers owed the state.
The five companies command about 30% of Kenya's sugar market, which consumes over 1 million tons a year. Agriculture Cabinet Secretary Peter Munya explained that the long leases of state-owned firms would help increase farmers' income, enhance competitiveness, and service delivery.
“Through comprehensive reforms, the government is determined to facilitate a multi-purpose sugar-cane industry that is efficient, diversified, and globally competitive,” he announced.
Kakamega Governor Wycliffe Oparanya praised the move, saying it would boost sugar production and increase income for farmers. The government has also banned the importation of sugar to help revive local manufacturers.
