Sugaronline Editorial - Taking another stab at getting it right By Meghan Sapp

Published: 03/24/2017, 2:39:00 PM

Kenya's Deputy President thinks he can get the sugar mill privatisation process back on track.



Kenya's Deputy President thinks he can get the sugar mill privatisation process back on track.

 


After well over a decade of stops and starts, it’s now the Deputy President of Kenya’s turn to try and sort through the mess that privatisation of the country’s state-owned sugar mills has become. As the meeting he has convened with stakeholders coincides with the upcoming African Sugar conference in Nairobi, the timing couldn’t be more interesting.

Between mills fighting over cane poaching, the crush inhibited by lack of cane and Mumias continuing to suffer giant losses despite massive government bailouts, perhaps its not surprising that privatisation has been put on a bit of a back burner. Some claim the urgency to sort out the mills eased when COMESA agreed to grant another extension before subjecting the country to duty-free sugar imports, but the DP insists that’s not the case.

Key to the current stalemate is the fact that the privatisation process started long before the new constitution that created counties and devolved much of the power to them. The national government has tried to move forward with privatisation in an effort to bring in strategic investors who will fix up and modernise the mills, reducing the import deficit and strengthening the industry so it can compete with its COMESA neighbours. But the counties don’t agree.

As agriculture is one of the “devolved powers” under the new constitution that was approved in 2010, the governors of the counties say that the mills are county assets rather than national. What’s more, they want the debts of the mills cleared, as planned, but not so they can be sold to private investors but instead handed over to the counties to run on behalf of local farmers.

Farmers too have been fighting for a piece of the mills, insisting they be handed a certain percentage of equity when investors are brought in.

Negotiations between the governors and the Privatisation Committee began back in October and quickly came to a stalemate. The Deputy President now hopes he can bring them along with farmers and other stakeholders back to the table to finally knock out an agreement but it’s going to be a hard row to hoe with so many opposing opinions and strong personalities in the room. They’ll have to get over themselves for the good of the industry and of the country but that may be asking too much.

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