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Plans to privatise sugar firms get into high gear

National Land Commission (NLC) asked to conduct site visits and searches for each of the companies to ascertain land ownership that has also been a subject of contention with local residents



Agriculture and Irrigation Cabinet Secretary Mwangi Kiujuri (centre), Nandi Governor Stephen Sang(on the left) and his Migori counterpart Okoth Obado during the meeting on privatisation of sugar factories in western Kenya.

Stakeholders in the sugar industry from the Western Kenya region have resolved to hold public participation in each of the five state controlled sugar factories before they are privatised.

At a high level stakeholder consultative meeting held at Tom Mboya Labour College in Kisumu, the Privatisation Commission was asked to conduct public participation at individual factories starting next week and ascertain the status of each factory before the exercise commences.

According to the Cabinet Secretary Ministry of Agriculture and Irrigation Mwangi Kiunjuri , this will enable sugar firms that are ready go ahead with the privatisation process to proceed and those not ready given ample time to correct challenges facing them.

The National government and Privatisation Commission have been at cross-roads with County governments in whose jurisdiction the enlisted five sugar mills fall, over concerns that the process was initiated way back in 2009 before counties were created.

Governors from Kisumu, Migori, Nandi and Bungoma have insisted that counties have been left out of the shareholding in the envisaged sale in which a strategic investor is to take 51%, local farmers 24% and the remaining 25% retained by the National government.

During the meeting, the National Land Commission (NLC) was asked to conduct site visits and searches for each of the companies to ascertain land ownership that has also been a subject of contention with local residents.

The meeting also agreed that the sugar company’s debt currently amounting to Ksh 89 billion be written off before strategic investor is invited to take over their shareholding in each of the factories.

Kiunjuri confirmed that a cabinet memo for approval of writing off the debts has been prepared and that his Ministry is set to gazette sugar regulation by 31st March this year to ensure the process privatization undertaken smoothly.

The Chair of the Agriculture committee in the Council and Migori governor Okoth Obado, his Bungoma’s Wycliffe Wangamati , Nandi’s Stephen Sang and Kisumu Governor Prof Peter Anyang Nyong’o , who was represented by Deputy governor Dr. Mathew Owili said County government have a key role to play in the agriculture sector since it is a devolved function.

Obado said the process to identify a strategic investor must be not only be competitive but also take care of the interests of farmers.

“There is need to from previous privatization stories like Mumias Sugar Company that is not currently doing well and best practices worldwide to avoid pitfall” said Obado.

Governor Sang complained that the process must be fastracked and resolution arrived at, at previous consultative meetings concluded on time to avoid the delay witnessed in the past 10 years.

“We need to broaden the base product by diversifying the sector and get more by-products from sugar for farmers to get value” he added.

Present at the function was Privatisation Commission chairman Henry Obwocha and his NLC counterpart Mohammed Swazuri, Principal Secretary in the Ministry of Agriculture Richard Lesiyampe, Investment Secretary Esther Koimett, Kisumu Senator Fred Outa and Nyando MP Jared Okello, among others.

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Swazuri confirmed that the NLC has already has two reports regarding land ownership the five factories of Muhoroni, Chemilil, Sony, Nzoia and Miwani and that final status report would be ready in two weeks.

Koimett said National government was ready to see how county governments will be involved in the shareholding of the 25% assigned to her.

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