Raila promises to revive sugar sector


ODM Leader Raila Odinga

By: Justus Obando  @MountKenyaTimes

Orange Democratic Movement (ODM) party leader Raila Odinga has promised to reform the sugar sector in the Western and Nyanza regions to match continental markets.

Most of the factories are unable to operate at the installed optimum production capacity and are sinking into debt.

Speaking yesterday in Awendo, Migori County, Raila promised to institute far-reaching reforms in the sugar sector that will address the problem of shortage of the commodity locally.

The ODM boss who is yet to formally declare his candidature in the 2022 presidential contest, though all odds suggest he would be on the ballot paper as efforts to consolidate the opposition continue, said he will ensure Kenya produces a surplus of sugar, enough to sell in the Common Market for Eastern and Southern Africa (COMESA).

“I will introduce proper reforms in this sector. We have a huge market called COMESA that involves many countries. Until now, we are not doing well because our companies are performing poorly. But I will get these companies back and competitive in this market,” he said.

The former Prime Minister says he will begin by addressing operational and structural challenges facing publicly-owned millers.

“State-run sugar companies have had problems for many years. Nzoia, Mumias, Miwani, Chemelil, Muhoroni, and Sony are classic examples,”

The ODM outlined key problems affecting major sugar public companies such as Sony, Chemelil, Mumias and Nzoia to include; mismanagement, corruption, lack of markets for produce and increased losses leading to their closure.

Raila argues that public sector companies are supposed to be making a profit, even as he maintained that “there is no need to have companies that keep registering loses.”

He noted that private-owned sugar companies are doing well and making a profit compared to those owned by the state. He attributed this state of affairs to mismanagement.

According to Raila, another issue facing state-owned companies is runaway corruption. Under his leadership, he says he will end the menace in all public institutions.

“You find that companies that mill our sugar have their stores full with the commodity. But at the same time, our market is full of sugar that has been imported to the country.”

“This means there is a problem of where to sell this sugar because of lack of market. Farmers also suffer. Then there are losses, leading to huge debts by the local companies. Sony Sugar is almost insolvent because of this.” He charged

The former prime minister stated that leasing the sugar companies to private investors as recommended by the Council of Governors (CoG) is not the best solution to the collapsing industries.

Raila who is expected to make a major announcement next week Thursday, December 9, including a declaration of his position in the 2022 political matrix explained how a task force spearheaded by Kakamega Governor Wycliffe Oparanya went on a quest to identify the key problems affecting the sector.

Raila exuded confidence in the local empowerment of farmers, emphasizing that only through government empowerment and their own sacrifice and dedication to doing better would the industries flourish.

He stated that with the government working together with stakeholders to oversee good management of the companies by increasing the industries’ competitiveness, the sugar industry in the region would prosper without the need to lease them.

“We want to end this trend where you only expect the government to come in after you have made losses. This attitude has destroyed most state-owned enterprises. I will make sure these companies perform better, just like those that are privately-owned,” he vowed.

Raila hinted at an expansion of the Sony Sugar company from the current crushing capacity of 50,000 tons per day to 100,000 tones.

“We can do it. It is possible, and that is the direction we can take to become competitive in the COMESA market.”

“That will employ so many of our people and will help us deal with poverty in this region.” He said

Currently, Kenya produces an estimated 300,000 tonnes of sugar a year, compared with annual consumption of 500,000 tonnes. The deficit is covered by strictly controlled imports from the COMESA region.

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