Five strategies we can use to solve sugar imports saga

President Uhuru Kenyatta and Deputy President William Ruto tours Mumias Sugar Company, Kakamega County.Photo:PSCU

In retrospect, the ongoing debate over importation of sugar from Uganda could mark the turning-point in Kenya’s sugar industry. But this will only happen if the government refuses to be dragged into a debate that sacrifices the interests of sugar cane producers on the altar of petty politics.

That will not be easy. But then, in life, nothing comes easy. It is time for hard, tough decisions by all parties concerned. The first thing to recognise is that the only reason unscrupulous importers routinely flood the local market with what appears like cheap sugar is because corrupt Kenya Revenue Authority and Kenya Bureau of Standards’ officials sacrifice the welfare of Kenyan farmers and consumers by accepting bribes to allow the import of untaxed and low quality commodity.

The solution to the problem posed by sugar imports, irrespective of its origin, therefore, lies in the cleaning up of the two institutions. Time has come for a thorough lifestyle audit, carried out by independent entities preferably from outside the country, to be carried out on all staff dealing with the country’s imports. This would weed out those with questionable incomes. That would mean that the local Kenya sugar cane millers would be given a chance to compete on the basis of quality and price.

Second, plans to privatise the publicly-owned sugar companies should also be stepped up a notch higher. If this means the government has to clean up these companies’ balance sheets with capital injection, so be it.

Third, farmers should also be ready to play their part. Those who cannot plant the improved cane varieties on their own and need assistance in terms of farm in-puts should also be ready to sign water-tight contracts with the factories to ensure that they deliver their cane to those providing them with the in-puts. The current situation whereby farmers sell their cane to competitors who may offer them better prices because they invested no money in farm in-puts and extension services should come to an end.

Fourth, vested interests that reportedly pocket about 45 per cent of the farmers’ production costs simply by transporting the cane to the factory should also be broken up—at all costs. The same ruthlessness should be employed to smash the sugar distribution cartels that make more money importing untaxed, low quality sugar than distributing the locally produced commodity.

Fifth, national and county governments in the sugar-cane belt need to work in tandem to offer farmers alternative cash crops they can grow and get better returns. This would give farmers freedom to decide whether they continue growing a crop that takes at least a whole year to mature and offers only a small profit at the end of the back-breaking work or move on.

The good news is that these alternative crops are not hard to identify and need not be meant for the export market. The alternative could include the growing of oil seed crops some of which, like sunflower, do not require much rain or labour. It may be worth noting that whereas the entire local sugar industry is estimated to be worth Sh55 billion every year, the country is estimated to import raw materials to manufacture cooking oil worth Sh50 billion annually. It does not need rocket science to recognise that the country could import its entire sugar consumption and pay for the same with money saved from the local production of oil seeds.

More attractive

To make this proposition even more attractive, this move would reduce the friction Kenya imports generate in countries like Uganda whose balance of trade with us is heavily tilted against them. Kenyan exports to Uganda stand at about Sh800 billion while its exports to Kenya stand at about Sh150 billion. The fact that the counties currently growing sugar-cane at prohibitively high costs would have a first-mover advantage over their neighbours—both inside and outside the country —makes this option even more attractive.

This, unfortunately, is a reality that critics of the sugar import agreement between Kenya and Uganda are glossing over. Perhaps, they should be challenged to say how they expect Ugandans to continue tolerating our exports while shutting out of our market to their only competitive commodity. —[email protected]