Cooperatives and Micro, Small, and Medium Enterprises (MSMEs) Development Cabinet Secretary Wycliffe Oparanya has backed the government’s decision to lease State-owned sugar factories, saying the move is long overdue and critical to reviving the struggling sector.

Oparanya emphasised that most of the mills were in deep financial crisis, with many operating at a loss for years and unable to sustain profitable production.

According to the CS, who spoke as the transition process officially began, the factories have for a long time been operating with obsolete machinery, severely affecting their capacity to produce both raw and refined sugar efficiently.

He called on sugarcane farmers and other stakeholders to give the newly appointed strategic investors time to turn around the fortunes of the sector, which has long suffered under inefficient management and lack of viable investment.

Oparanya said the sector reforms proposed by the Presidential Task Force on Sugar, which he chaired, had recommended leasing as the most viable and sustainable solution for a period of not more than 20 years.

“We reached the conclusion that leasing was the best route to commercialise and revive these factories. The government, because of its bureaucratic inertia, is not a good manager of business. We have tried for decades with little to no success. Let the factories be leased,” he said.

His remarks came as the Cabinet Secretary for Agriculture, Mutahi Kagwe, directed immediate handover of management for all State-owned sugar factories earmarked for leasing including Nzoia, Chemelil, Muhoroni, and Sony Sugar — to the appointed strategic investors by last Saturday.

Improving livelihoods

This follows President William Ruto’s confirmation that leasing was a done deal, part of the broader Bottom-Up Economic Transformation Agenda (BETA)aimed at revitalising the agricultural sector and improving livelihoods of farmers.

Ruto has urged farmers to be patient with the ongoing reforms, promising that the government is committed to rebuilding the sector and fulfilling its pledges.

Oparanya echoed this sentiment, asking for understanding from the farming communities and reiterating the long-term benefits of the new model.

“What I find ironic is that while state-run mills are collapsing, privately owned sugar factories within the same regions are thriving. This clearly shows that what we need is a fundamental shift in management- leasing it is,” Oparanya observed.

In one of the significant transitions, Sony Sugar saw the new strategic investor take over operations, bringing in former Managing Director Jane Pamela to head the company’s transformation.

She replaced Martine Dima, who had served during the state-managed era with a lot of difficulties, ranging from production, erratic cane supplies to huge debts and losses. However, the takeover was not without early challenges. The incoming investors were immediately confronted by sugar buyers who had made substantial advance payments for sugar supplies and demanded compensation or delivery of goods.

Emotions ran high as some buyers expressed fears of losing their investments, but they were assured that all transaction records had been handed over to the new management and that they would receive the value of their money.

Despite these teething issues, the government and stakeholders remain optimistic that the leasing model will mark a turning point in the history of Kenya’s sugar sector, restoring productivity, protecting farmers’ incomes, and ensuring long-term sustainability.

Just like in Mumias, where farmers recently received long-awaited bonuses following the revival efforts, sugarcane farmers in Sony, Chemelil, Muhoroni, and Nzoia are expressing similar hopes.

They are optimistic that once new investors take over and stabilise these struggling state-owned sugar companies, they too will benefit from fair compensation for their produce.

Delayed payments

Many farmers led by Killion Osur, Argwings Adongo, said they have endured years of delayed payments and poor returns, and they now see a glimmer of hope in the ongoing reforms and privatisation efforts.

Their expectation is that with efficient management and renewed investment, the industry can once again become profitable and rewarding for the backbone of its operations—the farmers themselves.

“We have been assured of improved management and a lot of new benefits. We now want to give the new strategic investors ample time to see what they will do to us,’’ said Osur. Kenya Sugar Board (KSB) acting CEO Jude Chesire asked the farmers to embrace the changes for their own good.

“If we accept and allow the sugar factories to be leased, the new strategic investors will bring in new modern machines, invest heavily in the firm’s operations and revitalise the mills and pay farmers better dues,’’ he said.  Chesire called for calm as the leasing process starts.