Lobby faults Government on proposed sale of sugar firms

By John Oywa

Sugar Cane farmers have questioned the Government’s commitment in privatising the five state owned sugar firms after Treasury said only one was lined up for sale.

The Sugar Campaign for Change (Sucam), an industry lobby group, said in a statement yesterday this year’s budget proposal left the sugar sub-sector confused.

Sucam co-ordinator Michael Arum said Finance Minister Uhuru Kenyatta’s statement indicated that only the South Nyanza Sugar Company (Sony) would be sold alongside the National Bank to help bridge a financial deficit.

This, he said, was contradicting the privatisation commission, which, through the Privatisation Act 2005, put on course privatisation of the sugar industry for the five State-owned sugar firms that include Sony, Nzoia, Chemelil Muhoroni and Miwani.

Proposal

Mr Arum said the Agriculture ministry indicated that a draft proposal on the proposed privatisation was submitted to the Cabinet for approval in February.

During the presentation of the budget last week, Uhuru said the 2009/2010 budget had factored privatisation receipts amounting to Sh6 billion from the sale of Government shares in Sony and the National Bank.

He added: "It is now evident privatisation will not be complete before the close of the financial year, thus reducing the expected resource envelope by Sh6 billion."

The minister did not mention the other four sugar firms said to have been lined up for privatisation, raising fears that the much talked about exercise may not be implemented soon.

Last year, the privatisation commission visited the factories and told farmers to prepare for the sale. The sales were to be executed within six months.

But yesterday, Arum said the new turn of events was not in tandem with sugar industry stakeholder’s expectation about the process.

"The five state-owned sugar factories were supposed to be disposed of in block but not in piecemeal as the case with Sony. The move cast doubts about the Government commitment to the revamp the industry which was intended to attract private participation," he said.

He added: "During the brief awareness forums by the commission, farmers had resolved to embark on mobilisation of funds to purchase shares proposed by the consultant. The sugarcane farmers want an explanation."

Arum also faulted Uhuru for excluding the Sugar (Amendment) Bill 2008 among a list of Bills lined up for discussion Parliament for expedient disposal to attract private investment.

Bill missing

"The Sugar (Amendment) Bill 2008 was conspicuously missing from Uhuru’s list," he said.

Arum said the omission demonstrates unwillingness by the Government to fast track reforms appropriate to the process, which is likely to attract foreign direct investment (FDI) required for reviving the industry.

He criticised the Government for failing to recognise the sugar industry potential for the nation’s energy requirement.