By Anderson Ojwang
Western Kenya could be waking up from the economic doldrums that have bedeviled them for the last four decades after a near collapse of the sugar sector, which was the main economic mainstay.
The public-owned sugar industries in the region namely Chemelil Sugar Company, Nzoia Sugar Company, Muhoroni Sugar Company, and Sony Sugar Company have been in the intensive care unit, debt-ridden and operating below the capacity.
The public-owned sugar industries have for seasons suffered from dilapidated and outdated machinery and huge debts owed to the government and farmers that had adversely affected their operations.
This situation provided a soft landing for privately owned sugar companies to emerge and thrive in the region while the public-owned sugar companies struggled with some grounding to a near halt.
But President Willam Ruto is rewriting the story through his strategic intervention that includes a raft of radical measures that aim to increase and improve cane development and crushing capacity of the factories.
Among the radical measures President Ruto had pledged included a revamp of the sugar industry by opting to lease state-owned sugar mills instead of pursuing privatization.
Another measure involved bailing out the ailing sector by having the government write off Sh111 billion that was owed by the sugar companies to enable them to start operating from a clean slate.
Similarly, the President pledged that the government would disburse Sh2 billion for cane development with the first tranche of Sh 600m already undertaken.
The staff of the four government sugar companies were to be paid sh 6.94 billion in accrued arrears and this applied to Nzoia Sugar Company Limited, South Nyanza Sugar Company Limited, Muhoroni Sugar Company Limited, and Chemelil Sugar Company Limited.
The payment comes after the national assembly approved the leasing of the five sugar companies and a directive for payment of arrears under certificate No.039/13/2023.
“This is to request the Farmers and Staff to urgently confirm their Bank details with the management of the Sugar Companies in readiness for disbursement of the verified arrears,” the Ministry of Agriculture and Livestock Development Principal Secretary Kipronoh Ronoh said.
President Ruto said it was important to have a comprehensive overhaul in the management of the sugar sub-sector to make it productive.
“We are going to change the way the industry is managed. We have danced in this sector for the last 25 years. I am announcing here that we are not going to privatize our industry but to lease the sugar millers so that private investors can pump in money and we are going to terminate the contract if we feel things are not going the way they are supposed to go in helping the farmer, factory, and country.” he said during a recent investment conference in Kakamega county.
President Ruto asserted that, in alignment with other sectors, sugarcane farmers will receive year-end bonuses from sugar millers.
When the President visited Sony Sugar Company, he committed to have arrears owed to farmers paid to boost the sector.
The president gave the assurance during his visit to the Company on 8th October 2023 and the commitment has already been met.
President Ruto also said that the Sh 1.1 billion salary arrears accrued by the employees over the last three years will be settled.
Migori Governor, Ochilo Ayacko said a bold move by the president to streamline the sub-sector was going to revive the local economy and spur development.
“Since the Government cleared the arrears owed to the farmers who supplied milling and seed cane to SonySugar, the company is now able to attract high volumes of cane—of up to 15,000 tones per week. The arrears had been accrued over three years,” said Jared Kopiyo, chairman of the Sony Sugar Board.
He said at first the farmers were reluctant to supply the cane to the factory due to huge arrears but with the payment, the cane supply has improved.
“ By the end of January 2024, the farmers received their pay into their bank accounts. “The payment came as a big relief to us and we have now returned to cane farming,” said Mr. Jared Ayany, a large-scale farmer contracted by the company.
Another farmer, Mzee Dominic Akong’o, said he is now able to reinvest the money into cane production. The farmers spoke with the team from the Statehouse Communication Unit.
The Government has eventually given a nod to South Nyanza Sugar Company Ltd to implement their revised Human Resource (HR) Instruments seventeen years after the last approval in the year 2007.
The approved instruments: Career Guidelines, Organizational Structure, Grading Structure, Staff Establishment, and HR Policy and Procedure Manual—bundled in three publications—were officially presented to SonySugar by the State Corporations Advisory Committee (SCAC) Board Chairman, Mr. Patrick Mong’ony and CEO, Mr. Simon Indimuli on 4th September 2024.
The Managing Director Mr. Martine Dima said they can now recruit skilled staff, promote staff, and remunerate talents in line with the government structures and procedures.
Former Nyakach MP Pollyns Ochieng Daima says the action by the President has radically changed the sector and would go a long way in redefining the economy of the region.
“We are happy with the government initiative on the sugar cane industry. This engagement will stir new economic moment for the region,” he says.
