Govt writes off Sh117 billion loans to state-owned sugar mills

Ruto in Nyanza

President William Ruto in Migori County on Sunday October 8 during his four-day tour of Nyanza region. 

Photo credit: Courtesy | PCS

The government has written off Sh117 billion in loans that have crippled the operations of state-owned sugar mills.

President William Ruto made the announcement in Uriri and Awendo in Migori County on Sunday.

He met hundreds of sugarcane farmers in Awendo to assure them that they will benefit from their sugarcane farming investments.

He said sugarcane farmers in Migori will be paid their arrears, noting that Awendo-based Sony Sugar owes the farmers Sh865 million.

President Ruto said the sugar industry has suffered major challenges that have paralysed its operations and brought the country's economy to a standstill.

He named the ailing Mumias, Chemelil, Nzoia, Muhoroni and Sony among the sugar companies he is keen on reviving.

"We will work on the transformation of this sugar sector. We will have a new plan on how these companies will be managed and how farmers will get their rights," said President Ruto.

He said the country currently uses a lot of money to import sugar, but Kenyans have the capacity to produce a lot of the commodity.

"I want our farmers to earn enough through sugar production to employ more of our youth and grow our economy as a country. That is why I said in our Cabinet meeting that we have summed up all the debts that have been paralysing our companies," said Dr Ruto.

He added: "We found out that companies owe a total of Sh117 billion. Do you see the problem we have? Do you know how to count a billion? We have passed in our Cabinet to write off this debt".

The Head of State added that the National Assembly had also approved the cancellation of the debt using taxes paid by Kenyans.

"This week, we got a certificate from Parliament to write off the debt. In two, three, four weeks, we will announce how these companies will be properly managed," he said.

He said under the write-off plan, most of the farmers who supplied cane to Sony Sugar were not paid even though they supplied the raw material.

"My question is, the person who took the cane from these farmers, where did he take it? He is making me take money from Kenyans that would have been used elsewhere like buying drugs to pay a crooked person. That is why I said this must stop," he said.

He warned, however, that the sugar cartels would not escape his wrath and would have to pay for oppressing farmers.

"You know there are these crooked people who just move around and steal from us. They take us to court and elsewhere. They are used to stealing from us. We cannot continue to put money in a hole where farmers have given their produce, it has been processed, sold and then they are not paid and we have to look for money from Kenyans to clear it. You have to give me space to put these people right," he said.

He noted that there will be no privatisation of the companies and that the government will soon unveil a leasing plan that will ensure farmers benefit.