This archive report was first published on 21 August 2020.
Published on August 21, 2020, the Kenya Private Sector Alliance (KEPSA) has expressed support for the government's plan to lease five state-owned sugar mills. This move aims to improve the competitiveness of the country's sugar sector.
The proposed leasing of Chemelil, Miwani, Muhoroni, Nzoia, and South Nyanza sugar companies is expected to benefit all stakeholders across the value chain, including suppliers, transporters, production, service, and support extension workers, and farmers in the respective regions.
KEPSA's CEO noted that the organization had previously recommended leasing the debt-ridden sugar mills to private investors two years ago, to give them a new lease of life. The government's move to restructure and lease these firms is welcomed by KEPSA.
According to Karuga, leasing out the mills will enable the private sector to mobilize resources to rehabilitate and modernize existing facilities, improve financial, technical, and operational expertise, bring in efficiency, and return the mills to profitability.
The five mills have had loss-making streaks for more than a decade, negatively affecting economies in the regions they operate in, and the country as a whole. Previous interventions by the government, including bailouts, have not been successful.
Kenya's millers are not well-positioned to compete with their rivals, especially with the impending end to sugar import quotas from COMESA. Leasing the mills is seen as a way to sustainably put the country's sugar sector in order.
