Nairobi Governor Evans Kidero queried on illegal sugar imports

By WINSLEY MASESE

Nairobi Governor Evans Kidero has defended trade in sugar, saying market forces dictate business in the commodity.

Dr Kidero told MPs that export and import of the commodity is based on commercial sense and given Kenya’s deficit, it becomes difficult to put brakes on the practice.

He said the high cost of production of Kenyan sugar does not make it competitive compared to imports. This has led to lack of market for the local product, Kidero told MPs investigating illegal sugar imports.

“This is a free market and sugar is not a forbidden product in terms of its sale,” said Kidero.

Mount Elgon MP John Serut wanted Kidero to explain under what circumstances cheap sugar was allowed to enter the Kenyan market where it could not compete with the locally produced product.  Serut also sought to know why Kenya is the only country allowed to access the EU markets when it is facing a shortage.

Common practice

Kidero said during his time at Mumius Sugar Company, sales were in excess of 200,000 metric tonnes, with about five per cent exported, especially to the ACP countries, of which Kenya is a member, and the European Union.

He said this is a common practice even within the Comesa region where consumption outstrips production. Kidero left the company in 2012, having been at the helm since 2003, to venture into politics where he clinched the Nairobi governor’s seat in the March 4, 2013 General Election.

Kidero said the country needs a policy to ensure ethanol and cogeneration are pricing factors embedded in the farmers’ payment for delivered cane.

Currently, farmers are paid based on what is delivered, with the Comesa safeguards going for pay based on sucrose content. During Kidero’s tenure, Mumias diversified into ethanol production as well as cogeneration, which enables it to produce about 40 megawatts of energy and sell about 25 megawatts to the national grid.

The reclusion of fossil fuel from the company’s operations, he said, was able to save the company energy costs of about Sh10 million annually and generate about 300,000 metric tonnes of molasses.

The governor said millers face imminent collapse if they do not diversify.

“You were touted as one of the most visionary company chief executive in East Africa, during your time. Why did the company’s performance nosedive immediately you left?” Uriri MP John Kobado asked.

 “Profit is a function of revenue less expenses but am not able to completely have the details of the various operation parameters of the company.” Kidero answered.

He said during his tenure, farmers were paid promptly and the company was never bailed to restore debts as the cash flow was efficient.

He said he was not in a position to give a comprehensive account of sugar importation and exportation while at the helm of the company.

“I left the company about two years ago and the much I can do is to recollect since I do not have the documents,” he said.

The committee agreed that they write to Mumias to provide all documents into the alleged illegal import and export of sugar in the period.