Treasury delays release of Sh800m to Nzoia, Mumias

A shortage of cane has reduced local sugar production. FILE PHOTO | NMG
A shortage of cane has reduced local sugar production. FILE PHOTO | NMG  

The government is yet to release Sh800 million that President Uhuru Kenyatta promised two sugar millers during his political campaign tour in western Kenya nearly a month ago.

Mr Kenyatta had pledged to release the fund for the ailing Mumias Sugar Company and Nzoia Sugar Company to ease their financial burden.

The move has crippled millers’ effort to pay farmers’ dues. Nzoia owes farmers Sh263 million in arrears as at May 31 while Mumias has an outstanding debt of close to Sh1 billion to date.

The companies attributed the delay to government bureaucracy.

“We have not received the cash but we are still waiting for it to enable us to clear the dues that we owe our growers,” said a senior official at Nzoia.

Opposition politicians had dismissed government’s move of dishing out funds to the millers as a way of “bribing” the region to vote for the ruling coalition on August 8 election.

The millers have been struggling financially in the recent years and their woes have been worsened by an acute shortage of raw material that has seen most of them operate below capacity, forcing Sugar Directorate to more than double the imports to meet rising demand.

The directorate is projecting a shortage of 1.9 million metric tonnes of cane by the end of June, which will further put pressure on the supplies of the commodity in the market.

The regulator has blamed low production on drought, which affected sugar growing zones.

Kenya usually imports sugar ranging from 8,000 metric tonnes to 15,000 metric tonnes a month but the directorate increased the volumes significantly to 100,000 metric tonnes due to the reduced local supply.