Sugar sector Can Only Be revived through leasing and not privatization, President Ruto insists

President William Ruto has expressed determination to overhaul the sugar industry by opting for the lease of state-owned sugar mills instead of privatization. Addressing attendees at the Kakamega International Investment Conference (KAIICO) on Wednesday, Ruto emphasized the necessity of altering the management approach within the sugar sub-sector.

Highlighting a stagnant status quo that has persisted for the past two decades, Ruto affirmed the imperative need for change in the industry’s management. “We are committed to revolutionizing the management of this industry. For the past 25 years, we’ve been entangled in the same cycle. Today, I announce that instead of privatization, we will opt for leasing sugar mills. This move aims to encourage private investors to inject capital, with a clause allowing termination of contracts if they fail to serve the interests of farmers, factories, and the nation,” Ruto declared.

In addition, Ruto stressed the urgency of reducing imports, citing an annual expenditure of Sh500 billion on imported sugar and other commodities. He called upon legislators to heed this call, emphasizing increased investment in the cane development program to boost domestic production.

Ruto outlined plans for sugarcane farmers to receive year-end bonuses from sugar millers, aligning their treatment with that of other sectors. He also criticized certain individuals for holding the sector hostage and pledged to liberate sugarcane farmers from such constraints.

Furthermore, the government has earmarked Sh300 million in the forthcoming supplementary budget to clear outstanding debts owed by the Nzoia sugar factory. Additionally, the West Kenya Sugar Company has committed to investing Sh1.2 billion in cane development to ensure an ample supply of raw materials.

During the Kakamega International Investment Conference at MMUST, it was revealed that the West Kenya Sugar Company had invested Sh900 million in outgrower farms, resulting in the cultivation of 33,000 acres of sugarcane across more than ten counties last year.