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Government Responsible for Kenya's Sugar Challenges

  • Posted on:  Wednesday, 25 March 2015 14:54
  • Written by 

Hon Tim Wanyonyi, MP, Westlands Constituency

The Jubilee Government has neglected the sugar industry in the country. The industry faces imminent collapse as a result of neglect of the industry by the Government. The poor state of sugar companies and especially with their apparent inability to compete with sugar imports after the lapse of the sugar safeguards under COMESA treaties shows how the Government has neglected the sector. There has been a lot of corruption, mismanagement, embezzlement, political patronage and neglect by the people tasked with steering the industry to greater heights. In this article, I discuss three issues. First, challenges facing the sugar industry. Secondly, how Jubilee Government has neglected or failed to address the said challenges. Thirdly, how this neglect has had adverse effect on farmers and the general economy. Relatedly I discuss what the Government should do to save the sector.

There are many challenges facing the sugar industry in the country with the Government doing little to deal with them. The sector is faced with low productivity with factories being unable to reinvest and operate efficiently. Farmers are also not paid on time making it difficult for them to invest adequately at farm level. The factories owe farmers and other financiers about 50 billion Kshs and are now unable to pay with some companies like Miwani Sugar Company already in receivership. These among man other challenges have made it difficult for the industry to survive. To compound these challenges, COMESA safeguards have expired meaning the industry is bound to collapse unless the Government steps in. expiry of COMESA safeguards means unrestricted importation of sugar into the country from COMESA countries. Most of these countries produce sugar at a very low cost compared to Kenya meaning that imported sugar is likely to be cheaper meaning local industry would not be able to withstand such competition.

Despite the Government having been aware of all these challenges, it has done very little to save the sugar industry. For example, the Government has been seeking extension of COMESA safeguards ostensibly to streamline the sugar industry while doing nothing to address he challenges. There is little to show that there was any effort from the Government to streamline it. In fact, even before the expiry of the safeguards, there has been allegations cheap sugar importation to the country without necessary duties and with the Government being unable to curb the vice and illegal conduct. The Jubilee Government has also not been able prevent exploitation of farmers by the millers. The Government has not written off the debts owed by the millers, in spite of Parliament granting approval in January 2013. It is also clear that there has been massive corruption and mismanagement among policy makers and administrators with the Government being insensitive to it. 

The Government needs to understand that hundreds of thousands of people in the Western Kenya sugar belt stand to lose their jobs and livelihoods if the sugar industry in the region is not stream-lined and prioritized. If the Government continues to neglect the sugar industry, the levels of poverty will go up especially in Western Kenya which depends mostly on sugar cane farming. This is likely to lead to other resultant or consequential problems including high mortality rate in Western region because of dismal returns.

Therefore to save the sugar industry from eminent collapse, the Government needs to speed up the restructuring or privatization of the marked sugar Companies. Restructuring or privatization of the relevant local sugar companies if well handled, will inject more capital, diversify and make the industry more competitive. However, the restructuring or privatization of the sugar industry must take into account the interests of the farmers and the local people by educating them on the effects it will have on their source of livelihood and how they can acquire shares if the said companies are privatized or restructured.  It is also common knowledge that no investor would be attracted to a company whose balance sheet is at the crossroads. Therefore the Government must ensure as a matter of urgency that the debts as approved by parliament are written off before restructuring or privatization. The Government should also intervene and ensure that there is compliance to the constitutional provisions, Vision 2030 benchmarks and the agricultural laws ascribed in the Agriculture, Livestock and Food Authority Act, 2013 (AFFA) among others.

Hon Tim Wanyonyi is the MP, Westlands Constituency.

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Read 5315 times Last modified on Wednesday, 25 March 2015 15:11