The government has assured thousands of sugar factory workers that it will cover their salaries and pensions for the first year as they face transition following the official leasing of the mills to private owners.
In an official statement, Agriculture Cabinet Secretary Mutahi Kagwe announced that it had officially completed the leasing of Nzoia, Chemilil, Sony, and Muhoroni Sugar companies to private owners for 30 years, leaving thousands of workers in limbo.
In the leasing, Nzoia Sugar Company has been awarded to West Kenya Sugar Company, Chemilil awarded to Kibos Sugar & Allied Industries, Sony Sugar awarded to Busia Sugar Industry Ltd, and Muhoroni awarded to West Valley Sugar Company.
The Ministry informed the workers that there will be a 12-month transition period during which the four lessees shall evaluate their workforce needs and determine the criteria for the retention of current employees.
Workers were assured by the Ministry that it would remain responsible for all unpaid salary arrears, pension contributions, and statutory deductions up to the lease handover date, with an articulate payment schedule.
''Ksh1 billion will be paid to workers upon takeover (Ksh600 million to pay part of the staff arrears and the remaining Ksh400 million to pay salary as from May 2025),'' the statement read in part.
''Ksh1.5 billion will be released in July 2025 to be used for the payment of staff salaries and arrears,'' the statement continued.
Further, the government set June 30, 2026, as the last date to pay the salaries, after which the private owners will take over.
''The government shall continue to pay salary arrears at the rate of Ksh1.17 billion (to be verified) every quarter until June 30, 2026,'' the statement continued.
The Ministry concluded the leasing of the companies after lengthy consultations with key stakeholders across the sugar sector, including farmers, sugar factory workers, unions, Members of Parliament, and Governors, and approvals by the Cabinet.
The government argues that leasing these companies to private owners is the only way forward to save them from going under. CS Kagwe explained that the move was necessary to inject much-needed capital into the sector.
The leasing has, however, elicited mixed reactions and heated debates among the public and stakeholders who argue that it is a means of selling the companies and their properties, like land.
However, the Ministry assured all stakeholders that no public land would be sold or acquired under the leasing agreements.
''All assets belonging to the four sugar companies, including land, will remain the property of the national government,'' Kagwe said.
