NAIROBI: Local sugar millers will continue enjoying protection against competition from other producers in the Common Market for Eastern and Southern Africa (Comesa) for the next one year.
This follows a decision by the Comesa Trade and Customs Committee to grant Kenya another 12-month extension as it seeks to privatise State-owned sugar factories. This is the fourth time Kenya has been granted an extension from the regional bloc since it was granted the protection window in 2004.
Now it has up to February 28, 2017 to institute the necessary changes with a view to making it strong enough to compete with sugar from other Comesa members. Factories earmarked for privatisation include Nzoia, Sony, Chemelil, Muhoroni and Miwani Sugar Companies.
A statement from the Comesa Communication department says the Trade and Customs Committee, which is composed of representatives from member States, met last month and came up with what was considered “a win-win approach”.
“This Committee was mandated to process safeguards by the Council of Ministers. During its meeting, the committee considered the request from the Government of Kenya and made several recommendations,” the statement says.
The committee agreed the Kenyan sugar sector should be given a one-year extension of their existing safeguards, subject to review and renewal for another one year.
Further, the committee agreed a system allocating specific quotas to each member State should be put in place taking into account the agricultural calendar of the member states, in consultation with the member states and be based on a formula to be agreed by the Council of Ministers. The Secretariat would develop the draft criteria for allocating quotas. The statement further stated that the extension granted to Kenya would be ratified during the Comesa Council of Ministers’ meeting to be held on March 26 and 27, 2015 in Addis Ababa Ethiopia during the 18th Comesa Summit.
The Kenya sugar industry has been enjoying protection from the Comesa secretariat since 2004 and the protections have been extended three times. In 2008, they were extended for four years, in 2012 for two and 2013 for one year. The protection limits sugar that can be imported from member states.
Parliament recently approved waiver of over Sh40 billion State-owned sugar firms owe the Government, but this will have to wait as the debts will be written off after the entire privatisation programme is approved.