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Editorials

EDITORIAL: Fast track sugar mill leases

sugar factories
Miwani Sugar Company. FILE PHOTO | NMG 

The government must conclude the plan to lease the five State-owned sugar factories to private investors.

The decision to lease the assets is the latest attempt to deal with the struggling millers whose dwindling fortunes have been linked to a mix of corruption and political interference.

For decades, the government had talked of privatising the companies but nothing came of it. This is despite the millers costing taxpayers tens of billions of shillings, including through debt waivers.

The success of privately owned sugar millers has demonstrated that the government is not suited to operate in the production and distribution of the essential commodity.

It is therefore fitting that 29 companies, including some that are already running mills in the country, have applied to lease the struggling parastatals.

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Leasing the sugar mills to private investors is expected to make the country more competitive and as a result, less reliant on the so-called Comesa safeguards. Kenya’s sugar production costs currently stand at $700 (Sh75,500) per tonne or 36 per cent higher than import prices from the Comesa producers. The leasing plan must therefore be expedited to realise its benefits, including saving taxpayers from frequent bailouts of the beleaguered firms.

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