The proposed sale of Nzoia Sugar Company has sparked intense debate across political, economic, and public spheres, with growing concerns that the transaction could further entrench monopolistic control in Kenya’s sugar sector. The state-owned miller, one of the last public sugar firms still operational, is now on the auction block as part of a broader privatisation program targeting loss-making parastatals, though the government has clarified that it had leased to private investors.
While the government touts the sale as a lifeline for reviving the ailing firm and securing farmers’ incomes, experts and stakeholders warn that the move could pave the way for a near-monopoly, handing overwhelming market power to a handful of private millers already dominating the industry.
Nzoia Sugar, located in Bungoma County, was established in 1978 and has long served as a key economic anchor for western Kenya’s sugar belt. Despite its strategic location and fertile catchment area, the firm has suffered from chronic mismanagement, heavy debt, and outdated machinery—issues mirrored across Kenya’s state-run sugar factories.
The government, through the Privatization Commission, seeks to offload its majority stake in Nzoia alongside others such as Chemelil, Muhoroni, and South Nyanza Sugar. This move follows a 2023 Cabinet approval aimed at unlocking investment, boosting efficiency, and lifting burdens off the national budget. However, critics argue the process has been opaque, poorly timed, and slanted in favor of politically connected conglomerates.
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At the center of the debate is the role of West Kenya Sugar Company, a privately owned miller linked to the billionaire Rai family. The firm, which owns Kabras Sugar, already commands a sizeable market share. Industry analysts estimate it controls nearly 45–50% of the local sugar output, with influence extending into pricing, supply chains, and even regulatory negotiations.
Should the Rai group—directly or through proxy firms—acquire Nzoia Sugar, it would consolidate its hold over the western region’s sugarcane supply, leaving smaller millers and farmers at their mercy. “This is not just about buying an old factory,” says Dr. Paul Mwakwere, an economist specializing in agricultural policy. “It’s about controlling the entire value chain—from cane farming, milling, to distribution. That’s the textbook definition of a monopoly in the making.”
Farmers Fear Squeeze
Sugarcane farmers in Bungoma and neighbouring counties worry that the privatization will sideline their interests in favor of profit-driven operators. Currently, many depend on Nzoia’s outgrower schemes, though plagued with inefficiencies.
“If one player owns all the mills around us, they’ll dictate prices and payment terms,” laments Josephine Namulala, a farmer from Webuye. “We’ll have nowhere else to sell, and competition will disappear.” The Kenya Union of Sugarcane Farmers has demanded greater transparency in the sale process, calling for public participation, asset valuation, and protection clauses for growers.
Calls for Antitrust Intervention
Policy experts are now urging the Competition Authority of Kenya (CAK) to step in. Though Kenya’s Competition Act prohibits abuse of dominance and price-fixing, enforcement has often lagged behind the pace of industry consolidation. “CAK must treat this as a national interest issue,” says Prof. Mumo Matemu, a former regulator. “If this sale goes through unchecked, we risk turning our sugar sector into a private cartel.”
Government’s Position
The Ministry of Agriculture insists the sale will undergo due diligence. Cabinet Secretary Mithika Linturi has pledged that “only credible investors with a solid turnaround strategy” will be considered, and that farmers’ welfare remains a top priority. Still, questions linger about the criteria used to evaluate bidders and whether local communities will have a say in the final decision.
The Bigger Picture
Kenya imports an average of 400,000–600,000 metric tonnes of sugar annually to bridge local deficits. With the COMESA safeguards set to lapse, exposing the country to cheaper imports, the urgency to stabilize domestic production is real. But doing so by concentrating control in fewer hands could undermine the very stability the government seeks
The sale of Nzoia Sugar is more than a privatization exercise—it’s a pivotal moment that could reshape the future of Kenya’s sugar industry. Whether it revives production or reinforces monopolistic tendencies will depend on how transparent, inclusive, and fair the process is.
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