Kenya: Debt crisis hampers state-owned sugar millers

A chronic burden of indebtedness among state-owned sugar millers has emerged as an enduring challenge within the local sugar industry, acting as a significant deterrent to sectoral advancement and hampering multiple privatization endeavors.

In conjunction with other obstacles like the utilization of outdated factory equipment and a failure to adopt improved farming techniques, the substantial indebtedness of public millers has emerged as a pivotal factor contributing to the industry’s stagnation. Among these millers, namely Mumias, South Nyanza (Sony), Chemelil, Miwani, Muhoroni, and Nzoia sugar companies, a cumulative debt of Sh117 billion has accrued to the National Treasury. This liability encompasses not only unpaid loans but also unremitted taxes, alongside penalties and fines linked to the failure to service loans and meet tax obligations.

Historically, these mounting debts have thwarted attempts to privatize the sugar companies. Prior initiatives to alleviate the burden of loans, including a parliamentary-approved plan in 2013, failed to materialize.

Recently, President William Ruto addressed the issue, announcing the government’s intent to absolve the debts owed by the five aforementioned millers to the state. Ruto revealed that the total owed amounts to Sh117 billion, with this long-standing financial obligation now set for resolution.


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