No sweet tale as sugar cartels stir industry

By KENNETH KWAMA

Kenya’s sugar cartels are among business underworld’s most ambitious and ruthless entrepreneurs.

A few years ago, they could create artificial sugar shortages and manipulate the price of the precious commodity and reap super profits.

Together with clandestine businesspeople that operate in fertiliser and the agricultural sector, the sugar cartels have been linked to the country’s power elite and are believed to import cheap duty-free sugar to the country, which they sell exorbitantly to Kenyans.

One decade ago, June 26, 2003 to be precise, The East African Standard published a story titled: Ministers in sugar scam, say 93 MPs. The parliamentarians had accused two ministers and eight MPs of illegally importing sugar into the country.

According to the story, the MPs demanded an immediate probe into the alleged sugar imports scandal, charging that one of the importers was the wife of a minister in the then Narc Government.

“Drawn from both the governing party Narc and the opposition, the legislators also demanded the sacking of the Permanent Secretary in the Ministry of Livestock, Mr Daniel Mule,” the paper reported.

The activities of the sugar cartels made sugar an expensive commodity a decade ago when the issue was first reported.

Over the years, the continued existence of unscrupulous traders in the industry has been a source of great concern.

Newspaper reports have continued to detail their frightening stranglehold on the economy and daily life of Kenyans—and what it portends for the future of the industry.

And despite the flow of information, which almost always seem to suggest the people running Kenya’s sugar cartels are well known, no names have been laid bare.

According to the decade old story, the legislators, in the now fashionable system of going for the small fish while leaving the big ones, demanded the sacking of Mule. The two Government ministers and the minister’s wife alleged to be involved in the scam were never mentioned.

Two questions dominate the fight against the sugar cartels: Who is in charge of the industry, the Government or the cartels? And how deep have the cartels infiltrated the country?

Kenya’s current war against sugar cartels and the criminal syndicates that smuggle them not only looks like a lost course on the surface, but compared to the situation one decade ago, the prevailing circumstances suggest the situation could be more desperate than people already know.

There have been suggestions that the production deficit situation in the sugar industry is because the cartels  take advantage of the slightest excuses each year to make extra money at the expense of hapless households and businesses.

Questions have been raised why all sugar factories in Kenya still close at the same time for repairs. Just like it was in 2003 when the MPs demanded clear policy guidelines on the sugar sector, the current policies still mirror the policies that the Narc Government had in place when it took over the reigns of the country in January 2003.

The legislators demanded the Government comes out with a timetable of payments of money owed to Nzoia, Muhoroni, Chemelil, Miwani, Mumias and Sony factory cane farmers, whose payments had been pending, in some cases for up to 10 years.

Currently, there are no payment plans and the Government is yet to set a timeline within which farmers should be paid after sugarcane delivery. Generally, it is a free for all situation in which the issue of payment is left at the discretion of the sugarcane company, which usually pays at its pleasure.

Sugar prices

The price of sugar has risen to a historic high and although different newspaper analysis has suggested urgent corrective measures, there are no indications this will happen any time soon. Households across the country are already strained by the relentless climb in the cost of most basic items.

Two months ago, farmers were up in arms against four millers in Kakamega and Bungoma counties following a move to reduce prices for delivered cane.

West Kenya Sugar Company and Butali Sugar in Kakamega North District were reportedly besieged after they reviewed cane prices and started paying Sh3,700 and Sh3,800 respectively, down from Sh4,180 per tonne.

The tragedy for Kenyans is that while the amount being paid for delivered cane continues to go down, the price of sugar has continued to hover in regions that the average citizen finds exorbitant.

Generally, there is agreement that while increments in the cost of key import items such as petroleum may be driven by fundamentals like strength of the dollar, which is beyond the Government’s control, the historic high price of sugar, which started from time immemorial is one that ought to be addressed. This should not be a problem because Kenya has the means to produce the commodity locally and satisfy demand.