Sh 86 Billion debt write-off for struggling sugar companies

Kenya’s Cabinet Secretary for Agriculture Mwangi Kiunjuri revealed a plan by government to write off KSh 85.5 billion debt owed by five sugar factories in the Western region. The plan is to relieve them off their debt then privatize them. Mumias, Chemelil, Nzoia, Muhoroni, and Sony sugar are the five companies set to benefit from the waiver.

During a consultative meeting, the Cabinet Secretary said, “The government is fully committed to the revival of the sugar sub-sector and is keen on ensuring improved performance by the sugar milling companies…”

Sugar factories have been struggling under growing debt and poor performance for years. Mumias Sugar announced KSh15 billion loss for the year that ended in June 2018.

Some stakeholders are opposed to the privatization plan. The country’s former Prime Minister Raila Odinga proposed the merging of the factories as other methods used to revive them had failed.

Stakeholders in the meeting agreed that the Sugar Act should be re-enacted to help control the importation of sugar which has led to collapse of local companies. They also agreed to set up a Privatization Committee to help with the process of moving ownership from government to the private sector.