This archive report was first published on 27 September 2019.
Published on September 27, 2019, the collapse of Mumias Sugar Company, a once-thriving enterprise in western Kenya, has sent shockwaves throughout the region and the nation.
The sugar industry in western Kenya, particularly government-owned firms, has been struggling for decades, plagued by mismanagement, looting, and a failure to modernize and revamp the industry.
Kenya's sugar production costs are significantly higher compared to its eastern and southern African counterparts, making it uncompetitive in the market. The Comesa safeguards have been instrumental in preserving the local sugar industry, but without them, the industry would likely collapse.
The impending demise of Mumias Sugar will have far-reaching consequences, including the loss of direct jobs at the miller, outgrowers, and local businesses. Farmers who are owed substantial sums of money will also be affected, as their hopes of turning the company around fade.
The involvement of the KCB Group in securing its stake in the firm has raised concerns, as companies taken over by financiers to limit losses often struggle to recover. While the receiver may attempt to breathe life into the ailing firm, the prospects of success are slim, given the experiences of Muhoroni, Nakumatt, and other firms that have been placed under receivership.
It is imperative that those responsible for looting the firm, including former managers and directors, are held accountable for their actions. The culture of killing firms must be addressed, and those who have contributed to the downfall of Mumias Sugar must face the consequences of their actions.
