The Kisumu Labour and Employment court has temporarily suspended the lease of five state owned sugar millers. The five include; South Nyanza Sugar Company, Muhoroni Sugar, Miwani Sugar, Chemilil Sugar, and Nzoia Sugar.
The Kenya Union of Sugar Plantation and Allied Workers (Kuspaw) moved to the Kisumu court crying foul at government failure to pay arrears amounting to Ksh5 billion. In his order, Justice Nduma Nderi issued a temporary injunction stopping the leasing of the five firms.
Kuspaw alleges that their letters and pleas to the Agriculture ministry have gone unanswered. The lobby worries that should the lease materialize, the future of its members remains in jeopardy. Kuspaw represents over 5000 members allied to the sugar millers.
Figure from the sugar directorate indicate that Kenya’s sugar imports grew 19 percent in January to June 2020 to 237,581 metric tonnes from 200,442 tonnes recorded in a similar period last year.
The lease is strategic move by the government to revive the sugar sector. State millers have been financially distressed due to competition from cheap imported sugar. This has seen debt accruals that have crippled operations with for instance Muhoroni and Miwani under receivership.
Data from the Privatization Commission shows that the 5 sugar firms owed the Government and the Kenya Sugar Board as estimated Ksh40 Billion in 2019.
Earlier this month, the Agriculture minister appointed a team to oversee the leasing process to private investors.
RELATED
Team appointed to oversee leasing of 5 state-owned Sugar Mills
Kenya’s Sugar Imports Rise 19% in H1 to 237,581 Metric Tonnes
