Kenya gets lifeline to fix local sugar sector with COMESA extension
Kenya’s commitment to the revival of the collapsing sugar industry will once again be put to test.
This following another extension granted by regional economic bloc Common Market for Eastern and southern Africa (COMESA), to safeguard the sector for a further two years
For many, it is a bitter sweet moment for Kenya’s sugar industry after it secured a new two year COMESA extension for safeguards to enable it sort out the mess in its sugar industry.
The decision on paper is expected to offer relief to local millers which are on their knees, fighting off debt and low sugarcane supply.
“Our realizable capacity is around 2,700 tons of cane daily, at present we are doing 100 tons of cane on good days, basically operating only for 3 and half days per week,” Sony Sugar Company managing director Bernard Otieno said.
The lack of capacity by local millers has been at the heart of the challenge facing the sector, with millers unable to generate enough revenue to reinvest in modernizing their facilities.
“Our optional capacity is 3,000 tons per day, currently if we crash once a week we are lucky coz we are scouting for cane that is not there,” Nzoia Sugar communications manager Gilbert Akeyo said.
Mostly surviving on debt, the industry once a regional power house is today a pale shadow of its past.
But the news from Lusaka Zambia, the COMESA headquarters offers some glimmer of hope.
Former Kenya Sugar Board chairman Saulo Busolo the global sugar market remains highly competitive, with need for an overhaul of how the sector is run.
“The question of competition is something not really understood. Sugar is a sensitive commodity. Safeguards will protect from unwanted competition,” Mr Busolo said.
Kenya has since 2004 sought extensions of safeguards to protect its industry from duty free sugar from COMESA region.
But 14 years down the line, the country is yet to get its house in order.
Since the first protection window, the country was expected to institute a number of changes to make its industry stronger.
Top on the agenda was and still is privatization of five state millers which include Nzoia, Sony, Chemilil, Muhoroni, and Miwani.
The country was also expected to invest in faster and higher yielding cane varieties while putting in measures to reduce the cost of production.
Mr Busolo said layered policies and lack of government goodwill have set the noble quest back.
“The problem industry suffers from is too much policy, too much government, here government is self seeking so that when it gets engaged in sugar industry is to scheme profits for private ends. Compare the state sector with private sector like Butali, West Kenya, Transmara doing very well it shows you the state sector is asleep. This time round the new resolve, perhaps with appointment of competent board of directors, managers, and government getting off the inquiry so that it can be left to run,” he said.
With a growing local consumption and low production, importation of sugar is fast becoming an annual festival as unscrupulous traders take advantage to bring in excess sugar slowly stunting growth of the local sector.
Additional reporting by Sophie Kinoti