President William Ruto's cabinet on Tuesday, August 8 resolved to overturn the privatisation of six sugar companies that had been approved by previous governments.
The meeting held at Sagana State Lodge, specifically deliberated on interventions to help Mumias Sugar Company, Nzoia Sugar Company, Chemelil Sugar Company and Miwani Sugar Company resume optimal operations and chart a roadmap towards returning to profitability.
Muhoroni Sugar Company and South Nyanza Sugar Company will also benefit from the plan as well.
In a statement, the cabinet added that the decision has been partly informed by the challenges farmers across the sugarcane belt in Western Kenya are experiencing, especially delays in payments for cane deliveries.
"If the proposal by cabinet receives parliamentary approval, the state-owned entities will be operated under a lease and operate framework," read the dispatch in part.
The privatisation of these companies was approved on October 14, 2010, during President Mwai Kibaki's tenure.
The move was geared at attracting investors to alleviate the financial and managerial challenges that have perennially plagued the industries. From time to time, the sugarcane factories have been shut down due to liquidity challenges.
President Kibaki's strategy also involved enabling farmers to acquire shares in these companies. The Kibaki government held the position that offloading a stake to farmers would empower them to influence the companies' operations and management decisions.
Additionally, the government intended to establish a Trust to specifically attend to the concerns of farmers amid the transition to private ownership.
The cabinet meeting chaired by Ruto also resolved to address the high cost of sugar, which surged to Ksh500 in July.
"To address the high retail price of sugar fueled by an acute cane shortage in the country, Cabinet sanctioned the extension of the framework for duty-free importation of milled sugar to bridge the supply deficit," the Cabinet resolved.
The President had earlier clarified that these elevated prices were a result of inadequate mature cane in the farms ready for harvesting.
