‘Gov’t leased sugar factories, did not sell!’ Agriculture CS Kagwe clarifies

Agriculture Cabinet Secretary Mutahi Kagwe has clarified that no sugar factory in Kenya has been sold, stating that the government has only leased them out through a transparent process that received full Parliamentary approval.

Kagwe, who spoke before the National Assembly’s Agriculture Committee, dismissed claims that the leasing process lacked transparency, emphasizing that all stakeholders were involved from the beginning.

“There is no selling of sugar factories that has been done. It’s leasing that has been done, and Parliament approved the whole process. I dismiss assertions that the process was opaque, considering all stakeholders were involved,” said Kagwe.

The CS noted that Parliament had given a greenlight to the whole process from the onset and that every step taken was in line with its recommendations.

He reassured the public that the government remains committed to accountability and is open to share more information on the process and address all issues arising.

“The reforms in the sugar sector are something that have been going on in this House for a long time. Parliament itself had formed a sugar caucus and is the one that debated the issue of whether they should sell or lease the factories and finally decided to lease,” he said.

“We are ready to submit any document for scrutiny by Parliament and the general public, as requested by MP Ruth Odinga, to assure the public on the lease process. The ministry has no dog in the race, and there is no document which is hidden. All of us want the same thing: we want to save the farmers, make sure workers continue working and ensure their debts are paid.”

CS Kagwe went further to defend the move, arguing that the companies were on the verge of collapse over accrued debts amounting to more than Ksh.5 billion, if the government had not leased them.

According to the CS, the leasing process is the best decision to save the ailing sugar companies since the private developers will revamp the factories and safeguard the welfare of the farmers and the workers.

“Farmers are owed about Ksh.5.6 billion, and the irony is that we’ve got one factory that is run by the private sector that pays the farmers every week, pays taxes…they are not perfect, but at least they pay their workers every week,” he said.

“All farmers' debts were taken over by the government; no farmer is going to suffer. Unless you lease those debts, those debts owed by farmers could easily turn into bad debts. What we have done by going for the lease option is to convert bad workers’ debts into accounts receivable.”

Kagwe added: “The normal procurement processes were followed. Initially, we were pouring money into those factories and getting nothing. We were getting money from private sector millers then pouring it into the public sector millers, so there is no ill will of farmers.”

National Assembly Agriculture Committee Chair Dr. John Mutunga echoed Kagwe’s remarks, reiterating that the entire leasing process was subjected to Parliamentary oversight.

“The sugar leasing process was taken through Parliament; that's why other members are not worried. The leasing process was not restricted,” Dr. Mutunga noted.

The clarification comes amid rising public interest and political scrutiny over the leasing of State-owned sugar factories, with some leaders raising concerns over transparency and public participation.

In the recent leasing, West Kenya Sugar Company took over Nzoia Sugar Company, while Kibos Sugar and Allied Industries Ltd were handed over to Chemelil Sugar Company, all for a 30-year contract. 

Sony Sugar Company, on the other hand, was leased to Busia Sugar Industry, and West Valley Sugar Company Ltd will handle Muhoroni Sugar Company.