Kenya to reform sugar sector, write off Sh117 billion debt

Nairobi : The Kenyan government is planning to reform the sugar sector, including writing off Sh117 billion ($1 billion) in debt owed by public sugar millers.

The reforms are contained in the Sugar Bill 2022, which is currently in the National Assembly. The bill proposes to create a new regulator, the Kenya Sugar Board, that will license firms and develop and promote the industry. It will also delink the sugar sector from the Agriculture and Food Authority (AFA).

The bill also proposes stringent rules for sugar imports, including requiring importers to provide samples for testing before actual importation. This is aimed at protecting the local farmer from substandard products.

If the bill becomes law, the importation of sugar will only be allowed when there is a deficit of the commodity in the market. Those who flout this provision will face up to five years in jail or a fine of Sh10 million ($100,000).

The bill also envisages the reintroduction of the Sugar Development Fund and Sugar Levy, which were abolished in 2013. These funds will be used to support sugar research and development, as well as to provide extension services to sugarcane farmers.

The reforms are aimed at reviving the sugar sector, which has been plagued by problems in recent years, including non-payment of farmers, increased costs of production, and flooding of the market with cheap sugar.

The government hopes that the reforms will help to make the sugar sector more competitive and sustainable.

National Assembly Minority Leader Opiyo Wandayi emphasized that lumping key sectors under the AFA was a mistake, as it diverted attention from the sugar sector. He noted that the sugar industry had suffered since the AFA Act was enacted.

Wandayi criticized those who had profited from the sugar sector’s mismanagement and noted the example of Miwani Sugar, a publicly-owned factory that had been run down and lost substantial land to cartels.

Other public sugar millers in Kenya include Muhoroni, Chemelil, Mumias, Nzoia, and South Nyanza (Sony). The sugar sector has faced challenges such as farmer non-payment, rising production costs, shrinking sugarcane acreage, market scarcity, cheap sugar flooding, and poor management over the years.


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