Everything that could go wrong in the Kenyan sugar industry did go wrong — Miwani shut more than 20 years ago and only exists in name, Chemelil stopped milling for eight months until about a week ago due to a lack of service and money to pay workers and farmers while Mumias and Muhoroni have been in receivership operating at low capacity.
These misfortunes in the sugar industry, notwithstanding, Kenya hardly complains of the shortage of sugar. Kenyans enjoy sugar at a relatively lower price. In my view, the inability of the sugar industry to reflect on the supply, demand and even the price of sugar has itself contributed to the fall of the sugar industry in the country.
Some may argue that the failure of the public sugar industries must not necessarily reflect on the supply of sugar because other private millers quickly moved in to replace their dwindling public counterparts.
The argument may be true to some extent, but come to think of it, Mumias Sugar, for instance, accounted for 60 percent of the sugar in Kenya, don’t you think that its closure would automatically or at least for some time shock the supply chain, increase the demand of sugar and lead to the inflation of sugar?
If the private sugar factories in Kenya are not good enough to effectively account for the large void left by the ailing public millers as we have seen, then where does the sugar that seals the remaining void come from? It is this ‘surplus’ sugar that the country cannot account for that have consistently and gradually hit nails on the coffin of the Kenyan sugar industry.
Corruption, nepotism, favouritism and mismanagement have been largely attributed to the fall of the sugar industry. While these social evils are a day-to-day affair in the Kenyan public labour market when four distinct factories simultaneously face the same misfortunes, one starts to wonder if it is the managerial malfunctions of the individual sugar factories that are at fault, or could there be an external contributors to the failure of the sugar industry as a whole.
The latter seems more convincing because every manager and a policymaker wants to get it right. Even if a manager is corrupt, they will still want the company that they run to make profits — if not for the public good, then it is for them to find more resources that they could further extract. Moreover, it cannot be that it is only corrupt managers that often make it at the interview to run the sugar factories and lastly, the problems the sugar factories face in Kenya are similar in length and scope.
The assumptions of the managerial problems as the cause of the dwindling fortunes in the sugar industry in Kenya has even threatened to further deteriorate the already worsened situation. For example, the National Sugar Task Force recommended the merger of all the three millers in the Nyando sugar belt — Chemelil, Muhoroni, and Miwani in what they believed would optimise sugar production as well as boost income for cane farmers.
These recommendations are only good to the extent of that in which they are productive in the eyes of their proponents but watch out, if implemented, they would have far-reaching effects that are more likely to further sink the sugar industry. This is because they seek to solve non-existent causes of the sugar woes.
The problem is not in the number of factories, neither is it the managerial issues but the flooded market that is chocked by counterfeit sugar imported illegally. The imports are sold in the local market at a cheaper price, pushing the locally manufactured sugar out of the market.
This is what leads to low sales of the local sugar and the losses that make it impossible for the local factories to pay farmers and sustain employees.
The local supermarkets stock sugar packaged in transparent unbranded polythene bags or branded by the name of the retailer. The question is: Where do they find this sugar, yet they are not registered to manufacture sugar? And in the case of the ones packaged in transparent polythene, who are the suppliers of the sugar and where do they get it from? What’s more, the unbranded sugar is often sold at a cheaper price, so they are the favourite of the average Kenyans.
Kenya needs to not only ban the importation of counterfeit sugar but also crack down on its sale and consumption as the first firm, radical, and bold step to salvaging the local sugar industry.
Benedict Arwa via e-mail