Kenya’s Debt-ridden sugar millers to be privatised within five months

Privatisation Commission Chairman Henry Obwocha

NAIROBI: The country’s five debt-riddled sugar millers are to be privatised within the next five months, Privatisation Commission Chairman Henry Obwocha has said.

The announcement comes after the Government promised to clear the debts the State-owned millers owe cane farmers.

Nzoia Sugar Company has the highest debt at Sh29 billion, with Sony Sugar on the lower end at Sh1.2 billion. The five producers owe a total Sh41 billion.

However, clearing the outstanding payments has been viewed by some as an attempt to get farmers to accept the idea of privatising the millers.

Earlier, Mr Obwocha said the Government had set aside more than Sh30 billion to bail out the millers, as well as bring in modern machines to lower the costs of sugar production.

And over the last two weeks, the commission has been speaking to the various factories’ stakeholders in public forums to outline the privatisation agenda.

“We have already gone to all the five factories — Nzoia, Chemelil, Muhoroni, Miwani and Sony — and engaged the concerned bodies about the privatisation idea, and everyone is very positive about it.”

Speaking at Sony Sugar’s offices during a consultative meeting that brought together commissioners leading the privatisation process and farmers, Obwocha said the debts would be cleared off the companies’ books immediately the farmers agree to the privatisation process.

He added that farmers would enjoy more benefits once the millers are privatised, and said the process had failed with Mumias because of poor management.

The farmers who attended the meeting welcomed the move, but asked to be allocated more shares than the proposed 24 per cent, as well as be given longer than three years to organise themselves. Under the proposed plan, 51 per cent of shares in the millers is to be sold to strategic partners, with 25 per cent retained by the Government.

“We want the privatisation body to bring an elaborate write-up that contains the finer details on this process so that farmers can understand the context before the process is endorsed,” said Ezra Okoth, the secretary general of the Kenya Federation of Sugarcane Farmers Union Secretary General.

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