Kakamega Governor Wycliffe Oparanya has revealed many local companies and investors have shown interest in investing in sugar companies, with plans to lease the millers outlined by the government. Speaking during an interview with West FM on Sunday night, Oparanya said Agriculture CS Peter Munya will oversee the process but leaders from the region will be keen to ensure the leasing process is done well.
As part of the plans to revive the sugar sector, the government said it will lease sugar factories-Chemelil, Miwani, Muhoroni,Nzoia-to private investors and companies, with the aim being making the factories more attractive outfits for business and reviving their operations with some already under receivership. A different plan has been developed for Mumias Sugar Company, which is partly private, with the government possibly selling off its shareholding in the miller. The lessees will operate the factories and produce sugar as private entities, with government still owning assets. Moreover, sugar factories% debts totalling Kshs 62 billion, including Kshs 4 billion for unpaid taxes and penalties have been waived.
Oparanya said the companies collapsed largely because of corruption and mismanagement, “If they are run by the government, some people think the resources are available to everyone and are misused, but when they are run by private entities, they are managed well,” he said. He said the recommendations to revive the sector are part of the sugar taskforce report, and that they are also included in the Sugar Bill. He admitted leaders made a mistake back in 2012 by rejecting the Sugar Act, which had the sugar development levy, and it will once again be factored.
The Council of Governors chairman said leaders and stakeholders opted against privatization of the sugar companies, “If we went that way, it would probably take 5 years in some case to tie down a conclusive deal.” He added that the companies will be leased to entities with the required capability to perform, with financial guarantee and capability a key factor.