Four private investors awarded 30-year leases to Nzoia Sugar, Chemelil Sugar, Sony Sugar, and Muhoroni Sugar companies are set to inject KSh12.29 billion towards revamping the ailing factories.
Under the lease agreements announced by the Ministry of Agriculture and Livestock Development, West Kenya Sugar Company will invest KSh5.76 billion in Nzoia Sugar, Kibos Sugar & Allied Industries will inject KSh4.5 billion into Chemelili, West Valley Sugar will commit KSh1.02 billion to Muhoroni and Busia Sugar Industry will invest KSh1 billion in Sony Sugar.
In addition, the four firms will pay KSh521.9 million in goodwill for the leasing of factory land and commit to annual lease payments that will fund cane development and improve community welfare.
In a statement, Agriculture Cabinet Secretary Mutahi Kagwe said the government has already paid KSh1.7 billion in arrears and is committed to settling an additional KSh500 million by July to support the farmers and workers. A phased plan will also see sugar factory workers receive KSh1.5 billion in July and quarterly payments of KSh1.17 billion thereafter.
The CS clarified that no factory has been sold, noting the leasing model was approved by Parliament and widely consulted on with key stakeholders.
Kagwe, who appeared before the National Assembly Agriculture Committee on Tuesday amid uproar over leasing of the millers, said the government has only leased the firms and did this through a transparent process that received full parliamentary approval.
Leaders from Western and Nyanza regions have raised concerns over the plan to lease the sugar companies, saying it will hurt the economy in the region.
This comes as the Council of Governors has backs the ongoing reforms in the sugar sector. Speaking in Mombasa, the COG Chair Ahmed Abdullahi, Vice Chair Mutahi Kahiga, and the Committee on Agriculture in the COG chaired by Ken Lusaka have made a clarion call for the reforms not to be politicised since it’s a step toward the right direction.
The government first announced its plan to lease the four sugar factories to private investors in October 2023 in a bid to revive the country’s sugar sector.
