Controversy: Police join probe into sugar industry woes

By Moses Michira | Monday, Aug 20th 2018 at 00:00
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Jorum Abayo, a sugarcane farmer in Holo, Kisumu County, in his farm on May 30, 2015. The police have joined investigations into the collapse of the sugar industry. [File, Standard]

Police have opened investigations into the collapse of the country's sugar industry.

Ethics and Anti-Corruption Commission detectives have been dispatched to conduct a probe that could have huge ramifications for those who end up being indicted.

At the heart of the probe is how several sugar milling licences were issued and the death of several Government-owned factories, including Mumias and Nzoia sugar companies.

Private factories now have a firm grip on sugar production and importation, partly helped by dubious operations.

Joseph Barasa, who petitioned the National Assembly to look into the collapse of the industry, is among the people who will be questioned within the week.

He told The Standard that he had been invited to share with the detectives what he knew about the fall of the industry, which had led to the current situation where the country imports more than half of the sugar it needs.

Forward information

“I have been requested to forward information to the investigators on Wednesday,” said Mr Barasa, who is vice chairman of a farmers’ lobby group called Wedia.

The investigators will hand over their report to the Director of Public Prosecutions for action.

The entry of the police into the probe is the clearest indication that those who have facilitated the death of the sugar industry could finally face prosecution after previous half-hearted efforts.

Mr Barasa had sought from the National Assembly, among other things, the withdrawal of licences awarded to millers encroaching on the catchment areas of State-owned factories.

“A company such as West Kenya Sugar, despite having no contracted sugarcane farmers to its name in Bungoma and Busia counties, acquired three licences for sugar factory construction under questionable means,” the petition read in part.

Investigations by a committee of the National Assembly were thrown out two weeks ago over claims the legislators were compromised to defeat the probe.

But in the earlier report, sweeping recommendations were made, including investigating the Kenya Revenue Authority for aiding Mumias Sugar lodge fictitious exports to dodge taxes.

It also accused an audit firm of giving false information about the health of Mumias Sugar – once the biggest miller but now as good as dead.

Misleading Government

“It (firm's name withheld) should be held responsible for misleading the Government, other shareholders and public on the state of affairs in MSC during the period of their engagement as auditors,” the report by the Departmental Committee on Agriculture stated.

Not much has happened since the MPs tabled their report in March 2015 amid squabbles linked to influence from  suspected barons and managers.

Kenya Sugar Board, the regulator, told MPs there was a lot of sugarcane poaching at the expense of Mumias and Nzoia companies. Mismanagement of State millers, including Miwani, was the root cause of their collapse.

Illegal imports have only worsened the situation that has plunged more than 300,000 farmers into poverty. Kenya’s cost of production is about Sh87 per kilo, thrice that of countries such as Brazil, where it is said to be Sh30 a kilo. In Malawi, production costs Sh35.

Such low costs make Kenya the ideal destination for illegal imports.

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