NAIROBI, Kenya – Kenya’s struggling sugar industry faces fresh challenges following the enactment of the Sugar Act of 2024, which introduces significant regulatory changes, casting doubt on the future of a leasing plan for state-owned sugar factories.
The new law, recently signed by President William Ruto, shifts authority for leasing from the Agriculture and Food Authority (AFA) to the newly created Kenya Sugar Board (KSB), stalling the process as the board awaits full constitution.
Farmers, investors, and industry workers, who had anticipated the leasing initiative would boost management efficiency and profitability, are now in a state of uncertainty.
The Kenya Union of Sugarcane Plantation Workers (Kuspaw) expressed concern, as leasing was expected to revive an industry that has grappled with mismanagement and financial instability.
Kuspaw’s Secretary General, Francis Wangara, noted the union’s cautious outlook as it watches for government decisions on the leasing plan amid ongoing legal proceedings.
“The outcome of this shift will have a profound impact on workers’ livelihoods and job security,” he remarked.
The reintroduction of the Sugar Development Fund under the new Act has further complicated the future of leasing.
Killion Osur, Secretary General of the Kenya National Federation of Sugarcane Growers, questioned whether the state’s move to directly fund sugar mills might signal a shift away from leasing.
“With the government now injecting funds to revitalize mills, it begs the question if leasing is still necessary,” Osur said.
He suggested that a state-led revitalization approach could revive older strategies used in the sector, potentially sidelining private investors who had shown interest in the leasing plan.
Despite the doubts cast by the new Act, Jude Chesire, CEO of the Sugar Directorate, insisted that leasing remains a viable path forward for Kenya’s sugar industry.
Chesire argued that leasing would enable greater efficiency by attracting private investment, which could modernize equipment and enhance productivity at sugar mills without imposing substantial financial burdens on farmers.
“Long-term leases would encourage both farmers and investors to commit to sustainable practices, creating stability and profitability,” he noted.
Chesire maintained that, once the KSB is fully established and the Treasury finalizes the Act’s regulations, the leasing agenda should proceed.
However, for now, stakeholders remain wary. The outcome, they say, hinges not only on regulatory clarity but also on the political resolve to support the sector through these changes.
The new law, recently signed by President William Ruto, shifts authority for leasing from the Agriculture and Food Authority (AFA) to the newly created Kenya Sugar Board (KSB), stalling the process as the board awaits full constitution.
Farmers, investors, and industry workers, who had anticipated the leasing initiative would boost management efficiency and profitability, are now in a state of uncertainty.
The Kenya Union of Sugarcane Plantation Workers (Kuspaw) expressed concern, as leasing was expected to revive an industry that has grappled with mismanagement and financial instability.
Kuspaw’s Secretary General, Francis Wangara, noted the union’s cautious outlook as it watches for government decisions on the leasing plan amid ongoing legal proceedings.
“The outcome of this shift will have a profound impact on workers’ livelihoods and job security,” he remarked.
The reintroduction of the Sugar Development Fund under the new Act has further complicated the future of leasing.
Killion Osur, Secretary General of the Kenya National Federation of Sugarcane Growers, questioned whether the state’s move to directly fund sugar mills might signal a shift away from leasing.
“With the government now injecting funds to revitalize mills, it begs the question if leasing is still necessary,” Osur said.
He suggested that a state-led revitalization approach could revive older strategies used in the sector, potentially sidelining private investors who had shown interest in the leasing plan.
Despite the doubts cast by the new Act, Jude Chesire, CEO of the Sugar Directorate, insisted that leasing remains a viable path forward for Kenya’s sugar industry.
Chesire argued that leasing would enable greater efficiency by attracting private investment, which could modernize equipment and enhance productivity at sugar mills without imposing substantial financial burdens on farmers.
“Long-term leases would encourage both farmers and investors to commit to sustainable practices, creating stability and profitability,” he noted.
Chesire maintained that, once the KSB is fully established and the Treasury finalizes the Act’s regulations, the leasing agenda should proceed.
However, for now, stakeholders remain wary. The outcome, they say, hinges not only on regulatory clarity but also on the political resolve to support the sector through these changes.
